Gores small-cap senior exec Otley leaves firm

Victor Otley, one of the co-founders of Gores Group’s small-cap investment fund, left the firm at year-end, according to sources.

Otley updated his LinkedIn profile. He worked at Gores since 2006, helped lead fundraising for Gores Small Capitalization fund with other partners, and led the small-cap investment team to the end of the fund’s investment period.

Otley didn’t respond to a request for comment.

The small-cap group was launched in 2012 by Ashley Abdo, Otley, Catherine Pollard and Michael Nold, a statement from the firm at the time shows. Abdo left last year, his LinkedIn profile says. Nold left in 2012, shortly after the small-cap group was formed.

Pollard remains at the firm and is still one of the leaders on the small-cap team, a source confirmed

Another executive listed as working on the small-cap fund is Managing Director Jon Gimbel.

Gores raised $300 million in 2012 for Gores Small Capitalization Partners. That’s the firm’s best performing vehicle, generating a 14.6 percent internal rate of return as of March 31, 2017,   California State Teachers’ Retirement System data shows.

Gores Capital Partners III was set to co-invest $100 million alongside the small-cap fund, a news release said.

The small-cap fund was formed to invest in lower-middle-market businesses across tech, telecom, industrial, business services, media, healthcare and security in the U.S. and Europe. The firm looks for control-oriented investments of mature, underperforming businesses.

In June 2016, the firm announced the small-cap fund partnered with Platinum Equity in Data Blue, which provides customized storage, backup and server virtualization and consolidation services.

Gores’s future is uncertain in terms of the firm’s ability to raise a fourth fund, LPs told Buyouts in prior interviews. The firm had been premarketing Fund IV in 2016 but it’s unclear whether it got any traction on the fundraising.

The firm raised $2 billion for its third fund, which closed in 2011. It closed Fund II on $1.3 billion in 2007, and $400 million for its debut fund in 2003.

The debut fund was generating an 8.4 percent IRR as of March 2017, Florida State Board of Administration data shows. Fund II was producing a 3.8 percent IRR and a 1.14x total value to paid-in multiple, Florida said. Fund III, the firm’s largest fund, was generating a negative 0.1 percent IRR and a 1x multiple, Florida said.

Gores was formed by billionaire Alec Gores in 1987. His brother, Tom Gores, leads Platinum Equity.

Action Item: Check out Gores’s Form ADV here: http://bit.ly/2AR4O19

Photo courtesy of Wikimedia Commons