Anyone have any insight on how the Tom Gores (Platinum Equity) and Alex Gores (Gores Group) got their start in PE?
On paper they have fairly mediocre backgrounds - immigrants that did not come from money, no academic pedigree (Western Michigan and Michigan State grads), no IB experience to learn the industry and develop relationships, etc.
The only thing I can find is Alec Gores sold his computer distribution business in 1985 and then started the Gores Group. Who the hell gave him tens of millions to launch a fund when we had no experience?
Tom Gores worked at Gores Group for a bit before launching Platinum with a $700M debut fund at only 31 years old. How in the hell did he do that?
You should read up on the history of the LBO.
It was a lot less competitive to source deals and stack leverage on deals back when Alec Gores started. Keep in mind he sold his first co for a nice chunk of change...more than enough to start doing deals.
Books that paint the environment back then really well are things like King of Capital (blackstone), the one KKR one (cant remember name?), and Den of Thieves (Milken)
I’m in PE and well aware of the history. There was less competition but also significantly less capital to go around.l because it was such a new asset class. Well-known Wall Street guys like Schwartzman had to travel the world and beg for money to just get a start.
The Gores brothers had no track record and no pedigree. Who were their LPs? Why would anyone back them?
Can you think of any other examples of guys basically coming out of nowhere to build PE forms of this size?
Didn't they use a lot of their own cash? In fact isn't a lot of Platinum's equity today his own money?
You really didn't need that much cash to boot up a PE firm back then. Keep in mind he had a decent size exit that he used the proceeds from to boot up. Look at the equity KKR had to put up for their first few deals...next to nothing.
You’re absolutely right on the leverage side. His $2M check from selling his business would have been a decent starting point too.
But still, the situation is a little strange, no? Are there any other PE guys that got their start back then that had so little experience, pedigree, and relationships?
How did they know how to source deals, conduct diligence, hire advisors, line up and negotiate debt funding, etc?
To be quite honest I find their backgrounds highly suspicious. Maybe they’re exaggerating their rags to riches story and actually had funding from the Israeli mob or something.
Only took you a post and a few replies to get to the root of your "curiosity". Seems like a pretty thinly veiled antisemitic conspiracy theory...
The Gores Group has invested ~$4B of capital and raised nearly $6B since 2000. How much do you think they raised in the 80s? The LBO space was significantly less crowded and when you add leverage into the equation you're not talking about huge fund raises to get going. People back successful entrepreneurs all the time. The more relevant current examples today would be the founders turned VCs (plenty of examples) that have gone on to make billions. You really felt the need to make a post like this because you couldn't find a detailed accounting of how they made their fortunes (30-40 years ago in a largely pre-internet era) with a quick google search?
Ray Chambers
The first person to start a hedge fund was a farmer. You’re viewing pe in early 80s as it is today, it’s wasn’t that. Henry Kravis was doing 20mm deals back then and that was viewed as large. He was just early to a booming industry and put his own money to work
It’s seem strange and not intuitive to you. They however, are fucking billionaires. And billionaires tend to figure things out without needing someone to hold their hand and explain every little thing to them.
Are you jerking off to a picture of them right now?
Look there was a guy downvoted because of his comments on "Mossad's Plants". I think we can all agree that their story smells a little bit fishy. I have also wrote bellow that if it is confirmed Marc Rich was Mossad's sayan why Gores bros can't be?!? Or how can "we" on WSO know Israeli/Ukrainian/Russian Mafia bosses didn't back their next venture. It doesn't matter to me and I don't care about how they raised their capital but what is indeed strange is their background, computers selling business which BTW can be a nice "cover" for any kind of dirty businesses and their lack of IB skills.
I can't understand how Gores bros were able to outsmart famous PE investors and pick up so fast all the LBO/fin. engineering secret sauce ingredients. I am calling all PE wizards to show me the shortcut to start making serious deals after first year of exiting business for only $2m. There is also another component in this story. Let's say that at that time $2m was enough to pull of a PE shop and hire some smart ass PE guys like you are at WSO. I know ex-IB bankers now working for my PE shop will eat my dinner, my company and me as well if they will see a slight chance to outsmart me, I mean why will super ambitious PE professionals want to work for less educated owner?!? Then as we can see from a wiki post their first investments were pure turnaround deals (besides mastering leverage finance they can also implement radical cost cutting/change management solutions across different industries).
Maybe they were just lucky damn smart business operators.
Tom Gores >> Henry Kravis (change my mind)
Lol, Ukrainian/Russian mafia? They are busy pimping out their sisters to Arab sheikhs. That’s big time for them. They are not pulling the puppet strings on J. Epstein and the like.
Merchants of debt
Barbarians at the Gate
Didn't Tom have an affair with his brother's wife?
Yep. Tom banged Alec's wife. It's widely known and was the cause of several public spats.
Damn that’s fucked up lmao. Your own brother’s wife, it’s kinda nasty if you think about it.
They are Mossad plants
I don't know why people downvoted your comment about Mossad. I mean c'mon their story smells a little bit fishy and if it is confirmed Marc Rich was Mossad's sayan why Gores bros can't be?!?
Besides their background and computer selling business which can be a nice "cover" we need to take in consideration their lack of IB skills. I really don't know how did those guys be able to outsmart some famous PE investors and also pick up so fast all LBO/fin. engineering secret sauce ingredients.
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