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 Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus