TSG Targets Growth Plays
Firm will look to invest between $200 million to $250 million from latest fund.
August 5, 2008
TSG Consumer Partners is targeting emerging consumer brand companies for its latest dedicated investment fund, TSG Consumer Growth Fund. The strategy has served the firm well in the past, though this is TSG's first effort dedicated solely to "growth" stories.
A San Francisco- and New York-based firm well known in the buyout industry for investing in various consumer brand businesses, TSG’s new fund will seek to invest $15 million to $30 million in consumer businesses with at least $30 million in annual sales. It will target high-growth categories like food and beverage, household products, health, beauty, pet products and consumer packaged goods.
The goal of the TSG Consumer Growth Fund is to invest in consumer brands with high growth potential that could benefit from TSG Consumer’s capital and operational resources as well as management advisory services generally available only for much larger companies, according to Yasser Toor, a managing director at TSG Consumer.
"TSG has a 20-year history of investing in emerging brands that have enjoyed aggressive growth during our investment tenure and we plan to build on those successes with new partner companies through our latest fund," he said.
Toor will oversee the investment activities of the TSG Consumer Growth Fund, which is an investment vehicle whose capital will come from the $900 million TSG5 LP fund raised by the firm in 2007. The fund will look to put $200 million to $250 million to work, Toor noted.
TSG is a firm with considerable experience in the consumer sector, having backed vitamin water maker Glaceau, cookie company Famous Amos, Smashbox Cosmetics, as well as invested in casual dining restaurant Yard House USA and Mauna Loa macadamia nuts among others.
TSG’s fifth fund, marking its last larger market-oriented consumer investment partnership, makes equity investments up to $100 million in later-stage consumer brands.
Toor said the firm, which is looking to distinguish itself further as the best solution for small company entrepreneurs, has traditionally invested in businesses that have the opportunity to grow through innovation and enter new channels of distribution. It’s a strategy that helped TSG Consumer’s portfolio companies post 18% sales growth and more than 25% Ebitda growth last year.
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