OpenGate Capital Partners is heading for a final close of its second fund at a hard cap of $550 million, a person with knowledge of the matter told Buyouts.
OpenGate Capital Partners II is expected to wrap up fundraising in October, two sources said. It could exceed the hard cap with a commitment from the private equity firm’s partners, one of the sources said.
Fund II has to date secured almost $448 million, just shy of an original target of $450 million, according to a September SEC filing. Current commitments already surpass by 47 percent the $305 million collected by Opengate’s inaugural institutional fund, closed in 2016.
OpenGate declined comment on its fundraising activity.
Los Angeles- and Paris-based OpenGate was launched in 2005 by Managing Partner and CEO Andrew Nikou, formerly a business development executive with Platinum Equity. Nikou seeded the firm’s operation with $30,000 of his own money, according to OpenGate’s website, and led a series of bootstrapped deals of increasing size in the years prior to raising Fund I.
OpenGate made its name with several early transactions, notably the 2008 acquisition of troubled media brand TV Guide Magazine from Rovi Corp for $1, plus the assumption of $50 million in liabilities. OpenGate restructured the company, restored it to profitability and sold it in 2015 to NTVB Media.
OpenGate continues to focus on turnarounds and other opportunities for improving operational value. It specializes in corporate carve-outs, typically where business units are underperforming or no longer compatible with the goals of parent organizations, as well as other complex situations. Deal flow is sourced in the industrials, technology, consumer and business services sectors.
Target opportunities in industrials, consumer and business services generally have revenue of up to $1 billion, while technology targets, for the most part software and tech-enabled services businesses, have revenue of $10 million to $150 million. Most portfolio companies are based in North America and Europe.
OpenGate is investing from both Funds I and II. OpenGate Capital Partners I is almost fully deployed with nine platform investments, including its most recent deal, Fichet, a Paris-based provider of security solutions carved out of Gunnebo Group late last year.
Since January, OpenGate has completed five new investments, all of them made by Fund II. They include InRule Technology, a Chicago-based business-decision automation software platform, acquired from the company’s founders in August, and Duraco, a Forest Park, Illinois-based maker of specialty tapes, carved out of Essentra in June.
OpenGate also closed three acquisitions in May: Fiven, a Cologne, Germany-based producer of silicon carbide formerly owned by Saint-Gobain; Sargent and Greenleaf, a Nicholasville, Kentucky-based maker of security locks bought from Stanley Black & Decker; and SMAC, a Paris-based provider of waterproofing and building envelope solutions bought from Colas Group.
Nikou leads a team of about 30 investment pros, including Partners Julian Lagrèze and Sebastien Kiekert Le Moult and Managing Directors Joshua Adams, Paul Bridwell, Matthias Gundlach, Fabien Marcantetti and Marc Veillas.
Chris Witkowsky contributed to this report.
Action item: See OpenGate Capital Partners’ investment criteria here.