The buyout shop blows away capital raising expectations in H2 2019

Platinum Equity Partners has joined an exclusive group of alternative investment firms. The private equity shop has raised $10 billion for its latest fund. The firm had raised $7 billion for its Platinum Equity Capital Partners V fund by July 2019. It raised the final three with ease over the last half of the year.

That $10 billion fund also blows away the $6.5 billion raised for its predecessor fund in 2017.

Platinum Equity Partners Fund No. 5

The firm raised capital from a wide range of global investors. However, Mark Barnhill, one of the firm’s partners, says that the investors have several common values.

“The investor base is diverse but has certain common threads, including an emphasis on finding managers with deep operational capabilities, differentiated strategies and a demonstrated track record across multiple economic cycles,” he said.

The investor base includes $59.1 billion Pennsylvania Public School Employees’ Retirement System, Harrisburg; the New Mexico State Investment Council, Santa Fe; and the Louisiana Teachers’ Retirement System.

In addition, don’t forget its other investors either. The Kansas Public Employees Retirement System, Topeka; the Los Angeles City Employees’ Retirement System; and the Los Angeles Water and Power Employees’ Retirement Plan also provided capital to the fund.

Fund Challenges

Meanwhile, The capital raise is ambitious given the sheer amount of dry powder sitting on the sidelines. Private equity firms are now sitting on roughly $1.5 trillion waiting for deployment.

As our Tim Melvin explained this week, there is too much money chasing few too little deals. Looking forward, investors looking to replicate the massive returns in private equity would also do well to read our recent interview with Verdad Partners’ Daniel Rasmussen.

He explains the types of valuations that are currently attractive and where investors can find them.

Related: Don Steinbrugge: Low Rates to Push Pensions into Hedge Funds