Platinum raises $6.5bn for Fund IV

The Tom Gores-led firm topped its initial fundraising target by $1bn on the strength of its ‘differentiated, operations-intensive investment strategy’.

Los Angeles-based firm Platinum Equity has raised $6.5 billion for its fourth fund, the firm said in a statement on Monday.

Platinum Equity Capital Partners IV was launched with an initial target of $5.5 billion, according to PEI data, and is considerably larger than its $3.75 billion 2011 predecessor. Law firm Simpson Thacher & Bartlett advised on Fund IV.

Fund IV counts numerous US public pensions as limited partners, including the Pennsylvania Public School Employees’ Retirement System, which committed $300 million. The fund also attracted a commitment from the €26 billion PensionDanmark. The firm said there were more than 200 limited partners fund from 28 countries.

Mark Barnhill, who leads Platinum’s fundraising efforts, said investors in the current cycle were “very focused on operations value-add and the ability to deliver downside protection”, in a statement.

The firm did not use a placement agent, according to a board memo prepared for the Los Angeles City Employees’ Retirement System in January, a repeat investor in Platinum’s funds.

Fund III had earned a net IRR of more than 35 percent, according to the same memo, which cited performance data from June 2016. Portfolio Advisors, the investment consultant advising LACERS, said the firm deserved the pension’s $30 million commitment because it had consistently outperformed across cycles, had an experienced and stable team, and a “differentiated, operations-intensive investment strategy”.

Platinum was established in 1994 by Tom Gores, who is chairman and chief executive.