Traub Capital Partners is making it official — closing on its inaugural fund and signaling that it’s ready to wheel and deal with plans to buy another two or three consumer companies.
The private equity firm, a sister company to the Traub consultancy, has already completed two deals worth a combined $400 million, including Signature Brands, maker of food decoration mainstays PAAS and Pumpkin Masters, and prestige beauty lab and manufacturer Mana Products.
Now that the i’s are dotted and t’s are crossed on the fund’s paperwork, it has $173 million under management and is looking to invest in brand-driven companies with annual revenues between $50 million and $250 million and earnings before interest, taxes, depreciation and amortization of roughly $15 million.
“We’re not going to be chasing unicorns, we’re not chasing shiny objects,” said Mortimer Singer, managing partner. “We are chasing businesses that have proven track records, that have a proven consumer profile and, frankly, brand equity that has been acquired over decades, not funded by venture capital over years.”
Singer founded Traub Capital with Brian Crosby and Geoffrey Lurie. David West joined as a managing director this year.
The group is now out to put a new spin on the investment game with a 10-year mind-set and an eye for control stakes in businesses that are solid, but could maybe use a little refreshing.
“We have built and are building what we continue to believe is a new breed of private equity fund,” Singer said.
The firm can bring the resources of the consultancy to bear on its investments.
Singer called them “sister companies” and said, “They are symbiotic.”
That has one hand potentially helping the other spot the best values in the market and also helping established players chart a new course for the future.
Singer is looking to take a very collaborative approach with the firm taking stakes at companies that are due for an ownership change, but have management in place.
He described Traub Capital as “the air force to the infantry of the management team” and a partner that would “not just show up every quarter, but there as their colleagues, right by their side to help them navigate all parts of their business.”
Traub Capital is on the hunt in food and personal care, where it has already invested, but also on what Singer described as “enthusiast businesses” in fashion, pointing to the active lifestyle space.
Singer said the fund could include two or three more deals with equity invested of $25 million to $35 million, plus co-investments and “very little leverage.”
The company enters the investment space in earnest at a time of significant change.
For several years before the pandemic, Traub the consultancy segmented the fashion world into Davids and Goliaths, putting out an exhaustive list of direct-to-consumer brands shaking up the market and taking on the big players.
But now those big companies have learned the lessons of the upstarts and are acting more like their smaller d-to-c counterparts and the upstarts are also borrowing from the establishment. Many of the newbies are in fact taking the next step and in the process of going public, including d-to-c darlings Warby Parker and Allbirds.
“The contenders and the incumbents, David and Goliath they’re both kind of now arm and arm going off into the sunset,” Singer said.
Traub Capital is looking to take the best from both as it seeks to push its investments into the future.
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