Firms & Funds

OpenGate eyes $500 mln for second fund

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OpenGate, private equity, Andrew Nikou, emerging managers, private equity, Jay Yook, Robert Lezec
Andrew Nikou, founder and CEO of OpenGate Capital. Photo courtesy of the firm.
  • OpenGate could raise $500 mln or more
  • Not clear whether it’s officially in market
  • Raised $305 mln in 2016

OpenGate Capital, formed by an ex-Platinum Equity executive, is eyeing $500 million for its second fund, sources told Buyouts.

It’s not clear whether the firm is officially in the market. One source said OpenGate could raise more than $500 million.

Terry Fahn, a spokesman for OpenGate, declined to comment.

The firm, launched by Andrew Nikou, closed its debut fund on $305 million in 2016. As of late 2016, Fund I was around 42 percent deployed. OpenGate specializes in carving out business units from larger organizations, a strategy the firm has followed since Nikou founded the firm in 2005.

“These guys are basically taking problems off the sellers’ hands, sometimes for nothing or just de minimis equity investments,” an investor with knowledge of the firm told Buyouts in a previous interview. “The fact that some of these deals end up dying isn’t quite as surprising.”

OpenGate has lost at least four of its portfolio companies over the years, including PennySaver USA, which shut its doors in 2015 after its lender cut off funding. OpenGate-backed Hamilton Scientific, Fusion Paperboard and Golden Guernsey Dairy met similar fates.

Most recently, OpenGate in January completed the acquisition of Mersive Technologies Inc, which provides wireless collaboration software. The firm acquired Mersive from its shareholders. Terms weren’t disclosed.

Last year, the firm bought Hufcor Inc, which designs, makes and installs movable partitions. At the time, Hufcor was OpenGate’s sixth acquisition from its debut fund along with Power Partners, Energi Fenestration Solutions, Bois & Materiaux, Alfatherm and EverZinc, the firm said in a statement.

The firm has gone through a few personnel changes. Two partners, Jay Yook and Robert Lezec, left the firm in recent years. Yook, who worked at OpenGate from 2005, left in 2016 and Lezec worked at the firm from 2008 to his departure in 2017. The two left by mutual agreement, sources told Buyouts at the time.

Action Item: Read OpenGate’s Form ADV here: http://bit.ly/2ps4VeO

Andrew Nikou, founder and CEO of OpenGate Capital. Photo courtesy of the firm.