I’ve been wondering what happened to Tom Gores’ bid for the Detroit Pistons. A story in the Detroit News today talks about the deal, but nothing new is revealed. Gores extended discussions with Pistons owner Karen Davidson after the window for formal negotiations expired in February. There’s no guarantee a deal will happen, according to the story.
Still, I did learn something new. I’ve been covering PE for a while but I didn’t know that Tom, and his brother Alec, are from Michigan. According to the Detroit News, Tom Gores “pushed a broom to work his way through Michigan State University.”
Gores founded Platinum Equity, of Los Angeles, in 1995 and is currently their chairman and CEO. His brother Alec Gores is head of the Gores Group.
The article is interesting for its definition of private equity: “It’s just another term for the age-old practice of investing rich people’s money to make them richer. If you’re good at it, you get rich, too.”
Tom Gores is very, very good at PE. The article says Platinum Equity does more than strip and sell companies. Gores, as head of Platinum Equity, restructures troubled companies and puts them back in the black (before they sell). Platinum charges management fees of 1.75% on the second $2.75 billion fund, and 2% on the first $700 million fund. Platinum is expected to open a third fund later this year.