By  on June 16, 2017
An insider’s guide to beauty’s biggest investors.

The M&A beauty scene has been a feeding frenzy of activity for the last three years, with multiples reaching historic highs. But before a hot Indie sells to a strategic, there is often a step in between—a cash infusion and strategic advice from an investment group. Here, WWD Beauty Inc has compiled a guide to the key private investors in the beauty space, from seed and venture capital-focused funds to firms whose check sizes run into the billions. The companies are listed in alphabetical order; the number of beauty investments includes current and prior beauty investments.Alliance Consumer GrowthNew York and Los AngelesNumber of Beauty Investments: 4Current Brands: Tata Harper, Nudestix, PacificaBig Win: Baby-care brand Babyganics, ACG’s first-ever investment, was acquired by SC Johnson in 2015.The Deal: ACG generally invests between $5 million and $30 million per deal in companies that have between $5 million to $50 million in revenues. The firm has about $500 million in assets under management.Key Player: Julian Steinberg, Managing PartnerBeechwood CapitalWellesley, Mass.Number of Beauty Investments: 3Current Brands: Tatcha, MiniLuxe, Violet GreyBig Win: N/AThe Deal: Beechwood Capital invests in companies that have between $5 million and $50 million in revenue. The firm usually invests between $1 million and $5 million per deal, generally in Series A or B VC rounds.Key Player: Larry Kahn, Partner, Managing DirectorBertram Capital PartnersSan Mateo, Calif.Number of Beauty Investments: 1Current Brands: Paula’s ChoiceBig Win: Bertram Capital Partners sold a majority stake in Paula’s Choice to TA Associates in 2016 for an estimated $275 million.The Deal: Bertram Capital Partners invests in companies with revenue between $30 million and $250 million and earnings before interest, taxes, depreciation and amortization of between $5 million and $30 million. The firm generally makes majority investments of between $25 million and $100 million per deal. The firm is investing from a $1.1 billion fund.Key Player: Jeff Drazan, Managing PartnerThe Carlyle GroupWashington, D.C.Number of Beauty Investments: 6Current Brands: ArrayBig Win: Bought a 50 percent stake in Vogue International (the parent company of hair-care brand OGX) for $400 million in 2014, sold the company in 2016 to Johnson & Johnson for $3.3 billion.The Deal: The Carlyle Group generally invests in companies that range from about $100 million in revenues up to billions, writing checks for approximately $50 million into the billions. The firm makes majority and minority investments and has about $158 billion in capital under management.Key Player: Jay Sammons, Managing Director, Global Consumer and RetailCastanea PartnersNewton, Mass.Number of Beauty Investments: 4Current Brands: First Aid Beauty, Drybar, ThymesBig Win: Castanea sold Urban Decay to L’Oréal in 2013 for an estimated $365 million.The Deal: Castanea makes minority and majority investments in companies with revenues between $25 million and $150 million. The firm generally invests $25 million to $85 million per deal. Castanea is investing from a $600 million fund.Key Player: Janet Gurwitch, Operating PartnerCentre Lane PartnersNew YorkNumber of Beauty Investments: 1Current Brands: Luminex Home Decor & FragranceBig Win: N/AThe Deal: Centre Lane Partners makes majority and minority investments in companies with $20 million to $500 million in revenues. The firm invests $5 million to $250 million per deal. Centre Lane is investing from a $1.1 billion fund.Key Player: Pierre Champion, Vice President, Business DevelopmentClayton, Dubilier & RiceNew YorkNumber of Beauty Investments: 3Current Brands: High Ridge Brands (Zest, Coast, White Rain, VO5, Rave, LA Looks, Thicker Fuller Hair, Zero Frizz).Big Win: CD&R exited its stake in Sally Beauty with $1.9 billion in proceeds in 2012, after buying a 47.5 percent stake for $571 million in 2006.The Deal: CD&R generally invests between $200 million to $600 million per transaction, and doesn’t have a specific revenue range for companies it invests in. Generally, CD&R takes majority positions, but it does look at minority deals as well.Key Player: Ken Giuriceo, PartnerCVC Capital PartnersLuxembourg CityNumber of Beauty Investments: 1Current Brands: DouglasBig Win: N/AThe Deal: CVC targets investments of $150 million and up from its European funds, and investments of $50 million and up from its Asian funds.Key Player: Søren Vestergaard-Poulsen, Managing PartnerDGNL VenturesNew YorkNumber of Beauty Investments: 4Current Brands: Bastide, Ipsy, Wander BeautyBig Win: DGNL founder Desiree Gruber was an early investor in Living Proof, which recently sold to Unilever for a sum said to be north of $150 million.The Deal: DGNL is an early-stage investor that looks to make early to growth stage investments in companies with between $500,000 and $20 million in revenues. The firm, co-founded by Nir Liberboim, an early investor in Ipsy, and Gruber, invests between $500,000 to $3 million per deal.Key Player: Nir Liberboim, Managing Partner.Encore Consumer CapitalSan FranciscoNumber of Beauty Investments: 4Current Brands: Butter London, Lorac, MyChelleBig Win: The firm invested in makeup brand Tarte in 2010 and sold it to Kosé Corp. in 2014 for a reported $135 million.The Deal: Encore Consumer Capital invests in beauty companies with revenues between $10 million and $100 million. The firm makes majority and minority investments, generally investing between $5 million and $30 million per deal. Encore has about $600 million in assets under management.Key Player: Kevin Murphy, Managing DirectorFinn Capital PartnersSan FranciscoNumber of Beauty Investments: 5Current Brands: S.W. Basics, Tatcha, Kjaer Weis, Ursa Major, BeautyKindBig Win: N/AThe Deal: Finn Capital Partners makes minority investments in early-stage beauty companies that typically have between $1 million and $10 million in revenue. The firm generally invests $250,000 to $1 million per deal.Key Player: Patrick Finn, Founder & Managing PartnerGeneral AtlanticNew YorkNumber of Beauty Investments: 1Current Brands: N/ABig Win: General Atlantic bought Too Faced for about $500 million in 2015 and sold it to Estée Lauder for $1.45 billion in 2016.The Deal: General Atlantic invests between $25 million and $500 million per deal and makes both majority and minority investments. The firm has about $19.6 billion in assets under management.Key Player: Andrew Ferrer, Principal, Retail & ConsumerGrace Beauty CapitalNew YorkNumber of Beauty Investments: 5Current Brands: Birchbox, GlamSquad, Harry’s, Supergoop, PinroseBig Win: N/AThe Deal: Grace Beauty Capital makes minority investments in beauty companies as seed or Series A rounds, but will invest in later rounds. The firm invests from $100,000 to $500,000 in companies that generally have less than $10 million in revenue.Key Player: Frank Fazzinga III, PresidentInvusNew YorkNumber of Beauty Investments: 1Current Brands: N/ABig Win: Invus invested in Bluemercury in 2006, partnering with the chain through a store expansion and the debut of its M-61 skin-care line, and sold the company for 20x EBITDA to Macy’s in 2015 in an all-cash $210 million deal.The Deal: Invus invests between $10 million and $800 million in companies from early-stage growth to turnarounds. The firm looks at companies with at least $5 million in revenue, and will consider investments in companies that aren’t profitable yet. Invus has about $5 billion in assets under management.Key Player: Benjamin Felt, DirectorJMK Consumer Growth PartnersNew YorkNumber of Beauty Investments: 2Current Brands: Babo Botanicals, Supergoop!Big Win: N/AThe Deal: JMK Consumer invests between $1 million and $10 million in consumer businesses with revenue of at least $2 million. The firm is investing from a $75 million fund.Key Player: Sarah Woelfel, Cofounder[caption id="attachment_10917556" align="aligncenter" width="578"]An insider’s guide to beauty’s biggest investors. An insider’s guide to beauty’s biggest investors.[/caption]Karp ReillyGreenwich, Conn.Number of Beauty Investments: 1Current Brands: BoxycharmBig Win: N/AThe Deal: KarpReilly makes investments as small as $3 million to $5 million, or as large as $75 million. The firm invests in companies with between $2 million and $50 million in revenue. KarpReilly is investing from a$200 million fund.Key Player: Allan Karp, CofounderL CattertonNew YorkNumber of Beauty Investments: 11Current Brands: Steiner Leisure (Elemis, La Therapie, Bliss, Laboratoire Remede, Jou), Intercos, StriVectin, NIA24, Cover FX, Kopari, Clio Cosmetics, Marubi, Dr. Wu, Tula, Espaço Laser.Big Win: N/AThe Deal: L Catterton invests in companies with as little as $5 million in revenues to over $1.5 billion, and generally invests between $10 million to $400 million per deal. The firm brought in LVMH, owner of Sephora, as a minority partner in 2016. L Catterton has about $14 billion in capital under management.Key Player: Jonathan Owsley, Managing PartnerMain Post PartnersSan FranciscoNumber of Beauty Investments: 4Current Brands: Milk MakeupBig Win: Exited Too Faced to General Atlantic for an estimated $500 million (which in turn sold it to The Estée Lauder Cos. for$1.45 billion in 2016.)The Deal: Main Post generally invests in companies with at least $15 million in revenue, writing checks between $25 million and $75 million per deal. Main Post is investing from a $400 million fund.Key Player: Jeff Mills, Managing Partner.Manzanita CapitalLondonNumber of Beauty Investments: 10Current Brands: Space NK, Diptyque, Byredo, Kevyn Aucoin, Eve Lom, Lipstick Queen, 10/10 Apothecary, Malin + Goetz, Glossier, Cultbeauty.comBig Win: N/AThe Deal: Manzanita is a family office with a venture arm that makes small investments, but generally outright buys brands for the long haul. In cases where the firm makes small investments, it does so looking for a path to a control stake.Key Player: William Fisher, Ceo and FounderMidOcean PartnersNew YorkNumber of Beauty Investments: 1Current Brands: Image Skin CareBig Win: N/AThe Deal: MidOcean targets majority investments in U.S. companies valued between $100 million and $500 million. The firm aims to invest $25 million to $100 million per deal and has about $4 billion in assets under management.Key Player: Ted Virtue, CeoNorth Castle PartnersGreenwich, Conn.Number of Beauty Investments: 6Current Brands: Mineral Fusion, The Red Door Spa, Mario Tricoci, Palladio BeautyBig Win: North Castle acquired Avalon Natural Products, the owner of Avalon Organics and Alba Botanica, in 2002 and sold the company in 2006 to Hain Celestial for $120 million.The Deal: North Castle makes both minority and majority investments in companies with at least $10 million in revenues. The firm invests between $10 million and $50 million per deal.Key Player: Jon Canarick, Managing DirectorNorwest Venture PartnersPalo Alto, Calif.Number of Beauty Investments: 3Current Brands: Madison Reed, PCA Skin, Kendra ScottBig Win: Norwest Venture Partners was a backer of Jet.com, which was recently acquired by Wal-Mart for $3.3 billion.The Deal: Norwest Venture Partners makes seed, venture, minority and control growth investments. For its venture investments, the firm invests between $10 million and $15 million; for growth equity, checks come between $20 million and $100 million.Key Player: Sonya Brown, General PartnerOncapTorontoNumber of Beauty Investments: 1Current Brands: Chatters CanadaBig Win: N/AThe Deal: Oncap focuses on investing in North American businesses valued between $50 million and $500 million. The firm makes minority and majority investments, generally between $50 million and $200 million. Oncap is investing from a $1.1 billion fund.Key Player: Mark MacTavish, Managing Director.San Francisco Equity PartnersSan FranciscoNumber of Beauty Investments: 3Current Brands: Yes To, JaponesqueBig Win: San Francisco Equity Partners backed Method before selling the company to Ecover in 2012.The Deal: San Francisco Equity Partners makes majority and minority investments in companies with up to $100 million in revenue. The firm generally invests $5 million to $25 million per deal and has about $100 million in beauty assets under management.Key Player: Scott Potter, Managing PartnerSequoia CapitalMenlo Park, Calif.Number of Beauty Investments: 1Current Brands: Charlotte TilburyBig Win: N/AThe Deal: Sequoia invests in seed stage and growth stage companies, with a focus on technology businesses. The firm’s investment history includes Alibaba and Zappos.Key Player: Michael Moritz, ChairmanSummit PartnersBostonNumber of Beauty Investments: 2Current Brands: MorpheBig Win: Took Physicians Formula public in 2006 after investing in 2003.The Deal: Summit makes majority and minority investments of between $10 million and $500 million. The company invests in a wide range of business sizes, and has about $9.5 billion in assets under management.Key Player: David Schiller, Chief Investor Relations OfficerSwander PaceSan FranciscoNumber of Beauty Investments: 5Current Brands: GloProfessional, Albolene, Swanson Premium.Big Win: The firm sold Gilchrist & Soames to Sysco subsidiary Guest Supply in 2015.The Deal: Swander Pace invests in companies with up to $500 million in revenue. The firm generally writes checks between $20 million and $150 million. Swander Pace has $1.8 billion in assets under management.Key Player: Heather Smith Thorne, Managing DirectorTA AssociatesBostonNumber of Beauty Investments: 2Current Brands: Paula’s Choice, Marc Anthony Hair CareBig Win: N/AThe Deal: TA Associates invests in profitable companies valued at between $100 million and $3 billion. The firm makes majority and minority investments and invests about $50 million to $500 million per deal.Key Player: Jeffrey Barber, Managing Director, North America Health Care and Consumer GroupTengram Capital PartnersGreenwich, Conn.Number of Beauty Investments: 6Current Brands: Algenist, Cos Bar, DevaCurl, Nest Fragrances, This WorksBig Win: Tengram sold Laura Geller to Warburg Pincus-backed Glansaol after re-branding the business under chief executive officer Elana Drell-Szyfer. In May it inked a deal to sell DevaCurl to Ares Management for a reported $250 million to $300 million.The Deal: Tengram invests between $10 million and $50 million in beauty companies, usually for a majority stake in the business. The firm generally invests in companies with at least $10 million in net revenues, but is said to be open to smaller deals (and minority investments, depending on the business). Tengram has about $600 million in assets under management.Key Player: Richard Gersten, PartnerTPGSan Francisco/Fort Worth, Tex.Number of Beauty Investments: 5Current Brands: E.l.f. Cosmetics, Beautycounter, IpsyBig Win: After its September 2016 initial public offering, shares of E.l.f. Cosmetics soared from $17 to the mid-$20s. TPG invested in the brand in 2014, and worked to grow its distribution, sales and profitability.The Deal: TPG Growth makes minority and majority investments in beauty companies, and writes checks of varying sizes. The firm has about $72 billion in assets under management, which includes about $8.3 billion under TPG Growth.Key Player: Bill McGlashan, Founder, Managing Partner, TPG Growth; Mark Grabowski, Partner, TPG Growth.TSG Consumer PartnersSan FranciscoNumber of Beauty Investments: 9Current Brands: N/ABig Win: In 2013, TSG made a minority investment in It Cosmetics, which sold to L’Oréal for $1.2 billion (a 6.1 times multiple) in 2016.The Deal: TSG is flexible in its investments, going as small as companies with $10 million in sales to those with more than $100 million in EBITDA. TSG invests between $10 million and $400 million per deal, with additional cash above $400 million available as co-investments from the firm’s limited partners. The firm has about $5 billion in assets under management.Key Player: Hadley Mullin, Senior Managing DirectorVMG PartnersSan FranciscoNumber of Beauty Investments: 4Current Brands: Drunk Elephant, Sun Bum.Big Win: Sold baby lifestyle and skin-care company Babyganics to SC Johnson in July.The Deal: VMG invests in beauty companies that have between $5 million and $200 million in sales. The firm makes majority and minority investments, usually investing between $5 million and $100 million per transaction.Key Player: Dave Baram, Founding PartnerWarburg PincusNew YorkNumber of Beauty Investments: 3Current Brands: Clark’s Botanicals, Julep, Laura Geller (through Glansaol).Big Win: Warburg Pincus, with TPG, acquired Neiman Marcus for $5.1 billion in 2005 and sold the business for $6 billion in 2013 to Ares Management and Canada Pension Plan Investment Board.The Deal: Warburg Pincus backs Glansaol, the beauty platform started by former Revlon chief executive officer Alan Ennis. The firm has $44 billion in private equity assets under management.Key Player: Annette Rodriguez, Managing Director, Health Care and ConsumerYellow Wood PartnersBostonNumber of Beauty Investments: 1Current Brands: PDC BrandsBig Win: N/AThe Deal: Yellow Wood Partners targets investments between $50 million and $150 million per deal.Key Player: Dana Schmaltz, PartnerSaveSave

To access this article, click here to subscribe or to log in.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus