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Platinum nearing big first close on Fund IV

  • Platinum heads for $3 bln first close
  • Targets $4.5 bln for Fund IV
  • Raised $3.75 bln for Fund III

Platinum Equity is closing in on around $3 billion for a first close later this month for its fourth fund, according to a person with knowledge of the fundraising.

The Los Angeles firm is targeting $4.5 billion. Whether Platinum has established a cap on Fund IV is unclear.

Daniel Whelan, a principal with Platinum, did not return a request for comment.

Park Hill Group is placement agent on the fundraising.

Platinum, founded by billionaire Tom Gores in 1995, raised $3.75 billion for its third fund in 2013. Fund III was generating a 34.8 percent net internal rate of return as of Dec. 31, 2015, Los Angeles City Employees’ Retirement System performance data shows.

Platinum’s criteria

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

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 month, Platinum acquired Electro Rent Corp, which leases and sells electronics, for about $382 million. Electro had been listed on Nasdaq.

As of March 11, 2016, Platinum managed about $5.7 billion of assets, according to the firm’s Form ADV.

Tom Gores is the brother of Alec Gores, who heads Gores Group.

Action Item: Platinum’s Form ADV: http://www.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=381728

The moon rises over downtown Los Angeles on March 19, 2011. Photo courtesy Reuters/Lucy Nicholson