Firm: Platinum Equity LLC
Fund: Platinum Equity Capital Partners III
Target: $3.75 billion
Amount Raised: $3.75 billion
Placement Agent: Park Hill Group
Legal Counsel: Simpson Thacher & Bartlett
“Our job will be to continue to earn the trust and confidence of our partners,” said Tom Gores, founder and CEO of Platinum Equity, in the press release announcing the fund’s closing. “Our approach to investing and operating in the future will very much entail the same fundamentals that helped create our success.”
The firm did not immediately respond to a request for further comment. (UPDATE: Mark Barnhill, a partner at the firm who heads its fundraising activities, told Buyouts that the market is challenging. “Investors are being more discerning about the managers they are investing with,” Barnhill said. In the case of Platinum Equity, he added, the drivers were the firm’s strong operational expertise, differentiated strategy and consistent track record.)
Platinum Equity launched fundraising for the new pool in December 2011, with a minimum investment of $10 million, according to filings the firm made with the Securities and Exchange Commission. In its most recent filing, in July, the firm said it had attracted 93 investors to the fund.
Platinum Equity said its Fund III investors included public and private pension funds, sovereign wealth funds, financial institutions, endowments and foundations and other institutional investors in North America, Europe, Australia, Asia and the Middle East.
Known investors in Platinum Equity vehicles include the Arizona State Retirement System, Florida State Board of Administration, Teacher Retirement System of Texas, Teachers’ Retirement System of Louisiana and West Virginia Investment Management Board, according to the Thomson One private equity database
Fund III represents a billion-dollar increase in size from Platinum Equity’s previous pool, which raised $2.75 billion and closed in 2008. As of Dec. 31, 2012, that fund was more than 90 percent drawn, according to investor New Mexico Education Retirement Board, and was returning 1.5x the LP’s commitment and generating a 17 percent IRR. Platinum Equity’s inaugural institutional fund, a 2004 vehicle that raised $700 million, had produced a 2.7x investment multiple and a 60.7 percent IRR as of Sept. 30, 2012, according to investor Pennsylvania Public School Employees’ Retirement System.
Before raising Fund I, Platinum Equity said it had invested more than $525 million since its founding in 1995.
Known as a turnaround specialist, Platinum Equity invests in a range of industries, including information technology, telecommunications, transportation, manufacturing, steel and metals services, automotive products and media and entertainment. Its portfolio currently numbers more than 30 operating companies. (UPDATE: Barnhill said the firm does not seek out financially distressed targets but does focus on “underperforming or undermanaged” companies whre the firm can apply its operational discipline. “Overall, we think this is a good market for us.”)
Platinum Equity has had an active year on the deals front, with more than 10 transactions in the bag so far. Pending deals include two carveouts: the firm’s $225 million acquisition of the CBS Outdoor International unit from CBS Corp, announced in July, and its $300 million deal in August with Emerson Electric Co. to buy 51 percent of Emerson’s embedded computing and power business.
The firm’s most recent exit, according to its website, was its sale in June of its U.S. Robotics Corp data communications business to UNICOM Global of Schaumburg, Illinois, a privately owned provider of a range of data technologies and services. The value of the transaction was not disclosed.
Platinum Equity said the law firm Simpson Thacher & Bartlett was its legal adviser on the Fund III capital campaign. Park Hill Group was placement adviser.