Gores Group closes $1.3bn fund(2)

The Los Angeles-based firm’s second fund is more than three times the size of its previous vehicle.

The Los Angeles-based Gores Group closed its second private equity fund, Gores Capital Partners II, on $1.3 billion (€967 million) today. The fund is over three times the size of The Gores Group’s debut fund, which closed on $400 million in November of 2003.

The fund had an initial target of $750 million, but by the end of fundraising was nearly two times oversubscribed. Lazard acted as a placement agent for the fund.

The Gores Group makes control buyout investments in non-core, underperforming or undervalued businesses in the US and Europe. GCP II will acquire mature companies, primarily in the technology, industrial, telecommunications and services sectors.

Alec Gores founded the firm in 1987 under the name Gores Technology Group. The firm has since changed its name to reflect its broader focus. Since its first fund close in 2003, the firm has invested in Wire One Communications, a provider of videoconferencing services, Brand-Rex, a designer and manufacturer of copper- and fiber-based cabling systems, and Avure Technologies, an industrial press manufacturing company, among others. Most recently, the firm bought Birmingham, Alabama-based HealthSouth Corporation’s diagnostics division for $47.5 million this April.

Alec Gores’ brother, Tom Gores, is also close to closing a new fund at his own firm, Beverly Hills-based Platinum Equity. The fund, Platinum’s second, is likely to close in September, and is on its way to exceeding its $1.5 billion target. Tom Gores’ firm operates in the steel, chemical manufacturing, and auto parts sectors.