OpenGate heads for third fund launch targeting up to $700m

Alessia Argentieri
19 May 2021

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OpenGate Capital is planning the launch of its third flagship fund over the next 6-12 months, with a target of up to $700m, according to a source close to the situation.

Like its predecessor, the fund is expected to invest in operationally complex businesses in niche segments of the market, focusing on corporate carve-outs, including orphaned divisions, stand-alone units and non-core divisions of larger corporations and public companies.

OpenGate declined to comment when contacted by Unquote.

The GP is currently investing its second fund, which held a final close on $585m in November 2019. The vehicle deploys equity tickets in the $15-100m range, with a sweet spot between $40m and $60m. It targets a wide variety of companies, generating revenues of up to $1.5bn and EBITDA from negative to around $75m. It has a special focus on the industrial, technology, consumer, and business services sectors.

OpenGate Capital Partners II is in the process of finalising its latest deal, the acquisition of Belgium-based visual simulation businesses ScioTeq and US-based Treality from TransDigm Group.

After the closing of this deal, expected by the end of May, the fund will be around 75% deployed. With the remaining capital, the GP intends to ink one additional platform deal and various add-ons.

Established in 2005, OpenGate is a private equity firm that focuses on the lower-mid-market, acquiring businesses throughout North America and Europe to boost their growth and international expansion.

The firm is headquartered in Los Angeles with an additional office in Paris, and employs 42 investment professionals, managing around $1bn in assets.

The GP has an investor base primarily composed of pension funds, sovereign funds and endowments, as well as family offices and corporate investors, with an equal split between Europe and North America, and some LPs from Asia and the Middle East.