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Exclusive: Platinum eyes $4.5 bln for impending Fund IV

  • Platinum preps Fund IV with $4.5 bln target
  • Fund has no cap yet
  • Fund to launch this month

Platinum Equity is set to launch its fourth fund targeting $4.5 billion, according to a person with knowledge of the firm.

Fund IV does not yet have a cap, the person said. Fund IV could officially launch this month, the person said.

Mark Barnhill, a spokesman for Platinum, the Beverly Hills, California, private equity firm, did not respond to a request for comment.

Park Hill Group is working as placement agent on the fundraising.

Platinum closed Fund III on $3.75 billion in 2013. Fund III was generating a 40.5 percent net internal rate of return as of June 30, 2015, according to information from Los Angeles City Employees’ Retirement System.

Fund III charged a 1.75 percent management fee on committed capital, subject to a step down at the end of the commitment period or the date when a successor fund made its initial investment, according to the firm’s Form ADV. Fees on Fund IV are not clear.

Platinum focuses on businesses with recurring revenues and long-term customer relationships that are undermanaged, underperforming and having some form of operational difficulty, according to an investment memo for Fund III from Pennsylvania Public School Employees’ Retirement System.

The firm looks to buy non-core or underperforming assets of larger companies or to take public companies private, according to an investment memo from Portfolio Advisors prepared for the Pennsylvania pension.

Earlier this year, Platinum agreed to sell the European business of industrial-parts maker Mactac to Avery Dennison for 200 million euros. In March, the firm completed the purchase of government contractor PAE from Lindsay Goldberg, Reuters reported.

Tom Gores, whose net worth is listed at $3.3 billion by Forbes as of May 17, 2016, launched Platinum in 1995. His brother, Alec Gores, heads Gores Group. As of March 11, 2016, Platinum managed about $5.7 billion of assets, according to the firm’s Form ADV.

Action Item: Platinum’s Form ADV: http://1.usa.gov/1Te7v4E

Photo courtesy of Wikimedia Commons/Eco84