Yellow Wood raises second fund, doubling down on consumer goods

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Yellow Wood Partners has raised a second middle-market fund to pursue investments in consumer brands and companies. The fund, Yellow Wood Capital Partners II LP, brought in approximately $370 million in capital committments.

Yellow Wood Capital Partners II LP will invest in a limited number of businesses, “probably no more than five,” according to the firm. Yellow Wood has yet to make any investments from the fund. The fund will target the consumer industry, and may include: beauty and personal care, health and wellness, household, food and beverage, and the pet care industry. Yellow Wood Capital Partners II will invest between approximately $50 million and $150 million in each portfolio company.

“We start Fund II with a strong pipeline of investment opportunities,” states Yellow Wood partner Tad Yanagi. “We look forward to working with skilled management teams to drive the transformation of new businesses into growing global consumer products companies that appeal to consumers across all distribution channels.”

Yellow Wood is a Boston-based private investment firm that invests exclusively in the middle-market consumer industry. The firm seeks to back branded consumer products across multiple channels, including drug, food and e-commerce. The firm recently sold PDC Brands, a manufacturer of beauty and personal care brands, for $1.425 billion. Dr. Teal's, a maker of Epsom salt which Yellow Wood acquired in 2014, was under the PDC Brands portfolio.

Fundraising efforts for private equity firms are reaching peak levels across the middle market. Recent capital raises include: Private Advisors’ raising the firm’s seventh small business PE fund; Saw Mill Capital’s closing of a new investment fund with $340 million in commitments; Industrial Opportunity Partner’s (IOP) raising its third fund with $450 million; Platte River Equity's closing the firm’s fourth fundraise; CVC Capital Partners’ $18 billion fund to target U.S. and European investments; the Riverside Co.’s first minority investment fund in April 2017. Park Hill served as placement agent on the raising of the Yellow Wood Capital Partners II LP, while Proskauer Rose LLP served as legal counsel.

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