UTIMCO: Maverick Capital Fund
In 1998, UTIMCO gave $96 million to the Maverick Capital Fund to invest. As of June 2003, the amount invested in the fund totals $476.6 million,1 with an equal amount of UTIMCO money through shares. Tom Loeffler and Tom Hicks pushed for the initial Maverick investment at the home of the Texas Rangers, the Ballpark at Arlington.
Maverick Capital was started in 1990 by Lee Ainslie and Evan, Sam, and Charles Wyly. Much like these four, Hicks and Loeffler are key GOP donors. In his two gubernatorial races. Sam and Charles Wyly donated a total of $210,273 to Governor George W. Bush, with a total of $460,000 for the 1998 elections (the same year as the UTIMCO investment) to Texas GOP causes. Evan and Lee are the two Managing Partners of the company and each added $10,000 to the Republican Party of Texas one month after the UTIMCO investment for their only donations for that election cycle.2 Loeffler, Hicks, and the brothers Wyly are Bush's fourth, tenth, and ninth career patrons respectively, and Lee Ainslie has also made his fair share of GOP donations in the past.
In 1997, the Wyly and Bass families mobilized to kill a proposed bill that would tax investment partnerships like Maverick. The Basses threatened to move out of state, but they stayed since the two families got together and hired James B. Francis Jr., another active friend of George W. Bush. He was the head of Bush's group called the Pioneers, mostly a group of men who had each donated at least $100,000 to Bush's national campaign for the 2000 presidential election. This was the same man who helped H. Ross Perot de-annex the town of Westlake to advance ideas for developing the region.3
Brazos Private Equity Partners, LLC is a private investment firm hailing from the Metroplex. The firm was started by former members of Hicks, Muse, Tate, & Furst (the firm of Tom Hicks), and it coincidentally has a strong connection to Maverick Capital: "Maverick provides [Brazos Partners with] valuable industry research, proprietary investment ideas and access to capital to support larger transactions."4
Maverick Capital was started in 1990 by the three Wylys. The private hedge fund currently handles over $20 billion in gross assets. Sam detached himself from the company in 1999 but maintains large holdings in the company, and overall the Wyly family has $400 million invested in Maverick. After leaving Maverick, Sam started the family of hedge funds known as Ranger Governance. Wyly now spends most of his time with Ranger Capital, an imitation of Maverick Capital.
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We work very hard to maintain a degree of separation between the entities...for instance, we never have and we never will be able to have any stake -- we being Maverick -- in Sterling Software or Michaels Stores, just because there's too much potential for conflict of interest.
-Lee S. Ainslie III, one of Maverick's Managing Partners6
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Sam Wyly has his hands in many things. Maverick Capital has money invested in Scottish Annuity & Life, another Wyly company. The overall investment is unknown, but the portion of the company owned by Maverick is around 9 percent. Maverick was also helpful to Green Mountain Power Corporation (now Green Mountain Energy) when it was just getting off the ground in 1997. Sam poured $40 million into the company via Maverick Capital in that single investment. In 1999, Maverick Capital put in another $15 million in its own investment, granting it roughly 11 percent of the company. After $55 million in investments through Maverick, Wyly himself put in another $100 million, eventually taking control of the company. The company has since been involved with BP Amoco and Nuon NV. BP Amoco currently owns 18.5 percent of the company, and Nuon owns around 20. Despite Wyly touting the company as green and environmentally friendly, Green Mountain strangely buys its bulk of products from massive polluting, large coal and nuclear utilities like Pacificorp, Allegheny Power and Conectiv.5