Firm: The Gores Group
Fund: Gores Capital Partners III
Target: $1.5 billion and a hard cap of $2 billion
Amount Raised: $1.04 billion
Placement Agent: Lazard Frères & Co.
Legal Adviser: Weil, Gotschal & Manges LLP
The Los Angeles buyout shop invests in technology, telecommunications, industrial and business services, as well as media, health care and security. The firm takes control stakes in mid-market business, and is expected to invest in 12 to 20 portfolio companies with the capital raised for Fund III by cutting checks of $50 million to $250 million.
The fund’s management fees during the investment period are 1.85 percent of commitments and after that are 1.5 percent of active investments, although they will be reduced by 100 percent of directors’ fees and 80 percent of transaction, break-up and other fees. The general partner will receive 20 percent of the carried interest.
According to a pension document, San Diego County made the pledge to Gores Capital Partners III due to attractive expected returns and a “favorable investment climate for distressed, turnaround, and carve-out situations in the U.S. and Europe.” Other limited partners in the fund include the
Interestingly, the pension document also indicates the board of the fund has some modest concern about the high profile maintained by founder Alec Gores. “Alec Gores and some relatives have attracted some media attention, possibly because of Mr. Gores’ being a successful businessman based in the Beverly Hills area,” the document said. “However, there is no evidence that any media publicity has affected the investment capabilities of The Gores Group or Mr. Gores himself.” It goes on to say that “there is no evidence that Mr. Gores himself has actively sought the limelight or uses his investments for objectives other than generating returns.”
That said, the limelight has found the Gores family, especially during a 2008 scandal involving an affair between Alec Gores’s then-wife, Lisa Gores, and his brother Tom Gores, the head of
Alec Gores founded The Gores Group in 1987. Along with Los Angeles, the firm also has offices in Boulder, Colo., and London.