Platinum Equity Continues PE Gold Rush With $6.5 Billion Fund

1
Platinum Equity Continues PE Gold Rush With $6.5 Billion Fund

Since the start of last September, five different private equity firms had closed new buyout funds with more than $5 billion in commitments, according to the PitchBook Platform. Make it six. Platinum Equity has joined the club, as the firm announced Monday the close of its fourth flagship fund on $6.5 billion, by far the largest vehicle in firm history.

Play Quizzes 4

Platinum will use the fresh capital to continue its strategy of pursuing corporate carveouts, public-to-private buyouts and other specialty acquisitions, including recent major additions like the former Network Power division of Emerson (NYSE: EMR) for $4 billion.

How Value Investors Can Win With Tech And “Fallen” Growth Stocks

Valuation Present ValueMany value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More

Platinum Equity

Soon, Platinum and the rest of the firms to raise recent mega-funds will have even more company—an unusual amount, in fact. Vista Equity Partners has already raised nearly $10.5 billion for its latest fund, with a final close expected before long. Apollo Global Management is closing in on a $20 billion vehicle. And other investors including Silver Lake, KKR and Insight Venture Partners are currently raising funds expected to top the $5 billion mark.

Why the increase in fund sizes across the private equity spectrum? One reason is simple cyclicality; another is that some LPs are slimming their lists of firms that they’re working with. (We’ve got more insight on the trend, plus a plethora of other data and analysis on the current state of the market, in our 2016 Annual PE & VC Fundraising Report.)

For Platinum, meanwhile, the oversubscribed Fund IV is a sign of strong investor response to the firm’s previous vehicles—response that’s strong for good reason. Here’s a look at the performance of the previous three funds in the firm’s primary buyout series, including some eye-popping IRRs (fund returns data as of 3Q):

Platinum was founded in 1995 by Tom Gores— the owner of the NBA’s Detroit Pistons—whose brother, Alec Gores, runs The Gores Group, another private equity firm. Tom’s shop completed 11 investments last year, a healthy figure but well below Platinum’s record high of 19 new deals done in 2010. In terms of sector, nearly half of Platinum’s portfolio additions since its founding have been in the B2B space, with the majority of the rest in either IT or B2C.

It was a busy Monday for the firm. In addition to closing its latest fund, Platinum has also announced plans to acquire from Staples the office supplier’s operations in Australia and New Zealand for an undisclosed amount. The news comes about two weeks after Staples completed the sale of its European division to Cerberus Capital Management in a separate deal.

Want to know more about Platinum’s past investments, closed funds, deal team and more? Platform subscribers can check it all out right here.

Read more of our featured PE fundraising content here.

Article by Kevin Dowd, PitchBook

Updated on

No posts to display

1 COMMENT

  1. Gold is always very hard thing to work out; I believe such investment needs to be made very carefully instead of rushing it. I work under OctaFX and with them; I get full value for investment. This comes to do with the mighty 50% bonus on deposit that they have which is use able too, so I am really able to enjoy things and it allows me to do well all the time. It is more enjoyable to do with no restrictions on how we work which is really what anyone would wish for.

Comments are closed.