Firms & Funds

Platinum prepares first and final close for debut small-cap fund

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Platinum Equity, Gores Group, private equity
Photo of Tom Gores sourced from Platinum's website
  • Tom Gores-led firm targeting $1 bln
  • Fund could raise up to $1.5 bln
  • Pennsylvania Public School Employees’ commits up to $200 mln

Platinum Equity is readying a first and final close on its debut small-cap fund, which could raise as much as $1.5 billion, documents released by Pennsylvania Public School Employees’ Retirement System show.

Platinum Equity Small Cap Fund is expected to close in April, according to a memo consultant Hamilton Lane prepared for the $53.5 billion retirement system. Platinum is targeting $1 billion with a hard cap of $1.5 billion.

Platinum’s likely seen significant investor demand for the fund, given the vehicle’s relatively speedy fundraise. The Wall Street Journal first reported in September that Platinum Equity was planning to raise $750 million for a small-cap fund. Buyouts earlier this year reported that the actual target was around $1 billion.

 The small-cap team is led by Nick Fries, Fernando Goni, Jason Leach and Joe Onwuegbusi, Buyouts reported.

Pennsylvania PSERS committed up to $200 million to the fund at its March 9 meeting. The general partnership group’s commitments to the fund will represent at least 3 percent of its total size.

Platinum Equity Small Cap Fund will invest in companies facing operational difficulties despite strong underlying businesses. The firm’s prepared to pursue several investment strategies to develop its positions in these companies, including leveraged buyouts and recapitalizations. Platinum might use the fund to make minority or growth-equity investments as well.

The typical small-cap fund portfolio company will have less than $450 million of revenue or $45 million of Ebitda, the staff memo says. Platinum’s older funds pursued smaller deals in the vein of what the firm is expected to explore with the small-cap fund.

The firm’s most recent flagship fund, Platinum Equity Partners IV, raised $6.5 billion in 2017.

Platinum was founded in 1995 by its current chairman and CEO, Tom Gores, brother of Gores Group Founder Alec Gores. 

Action Item: For more on Platinum Equity, visit www.platinumequity.com

Photo of Tom Gores sourced from Platinum’s website