Hicks, Muse, Tate & Furst, the US private equity firm, has closed its fifth buyout fund at $1.6bn (€1.8bn), nearly $3bn down on its original target.

Hicks, Muse had set out to raise a $4.5bn fund, which would have eclipsed the previous fund that closed in 1998. Then investors did not hesitate in handing over $4.1bn. However, this time round investors were reluctant to commit and the firm is believed to have offered guaranteed returns to draw investors in.