Andrew Nikou, the founder of OpenGate Capital, has made a name for himself by unlocking hidden-gem businesses within lumbering industrial and chemical companies. Nikou, who started OpenGate with just $30,000 of his own savings in 2005, has since built a firm with $1.5 billion in assets under management. The firm specializes in corporate carve-outs in the industrials and chemicals industries, with a track record of successful deals that have generated impressive returns. OpenGate’s most recent transaction involved the sale of French waterproofing and building insulation firm SMAC, which made 10 times its initial $17 million investment.
Carve-outs, which involve acquiring businesses from larger companies and transforming them into standalone investments, can be challenging due to the lack of separate audited financial statements and necessary leadership and staff. However, Nikou and his team have proven adept at navigating these complexities and identifying value where others may not see it. OpenGate’s second institutional fund, which closed in 2019 at $585 million, has posted an annual internal rate of return of 40%, showcasing the firm’s ability to deliver strong results in a competitive market.
Nikou’s background as the son of Iranian immigrants and a survivor of bullying has instilled in him a drive to succeed and prove his worth. After working in the dotcom industry and then landing a job at Platinum Equity, Nikou founded OpenGate with a focus on turning around underperforming businesses. One of the firm’s early successes was the acquisition of TV Guide magazine for $1 and successfully turning it around, ultimately selling it for three times the initial investment. Nikou’s ability to identify overlooked opportunities and execute successful turnaround strategies has fueled OpenGate’s growth and success.
Despite facing headwinds in the media industry, Nikou pivoted OpenGate’s focus to the industrials sector, with a specialization in carve-outs. The firm has made over 40 acquisitions in order to revamp lower and middle-market businesses, with notable successes such as Michigan’s Gabriel Ride Control. OpenGate’s ability to identify undervalued businesses and implement strategic changes to drive profitability has set it apart in the competitive private equity landscape. Nikou’s commitment to his health and fitness regime, as well as his focus on anti-aging practices, reflects his dedication to maintaining peak performance in all aspects of his life.
As the private equity market becomes increasingly competitive, with thousands of firms vying for deals in the lower middle market, Nikou’s ability to negotiate and close successful transactions has set him apart. His confidence and grace in navigating challenging deal-making environments have earned him respect from industry peers and advisors. With a proven track record of delivering strong returns and a focus on identifying hidden gems in the industrial and chemical sectors, Nikou and OpenGate Capital continue to thrive as leaders in the world of corporate carve-outs and turnaround investments.
