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TSG closes fifth fund on $875m

The San Francisco- and New York-based consumer products specialist has exceeded its last vehicle by $375m.

TSG Consumer Partners, a San Francisco and New York-based private equity firm that invests in branded consumer companies, has closed its fifth fund, TSG said in a statement. The fund, known as TSG5, is valued at $875 million (€658 million).

Limited partners who have made commitments to TSG5 include the State of Michigan, the New York State Teachers’ Retirement System and the State of Colorado, among others.

TSG plans to use the new fund for investments in the consumer brand sector, a strategy it has used since the firm’s inception by chairman J. Gary Shansby and chief executive officer Charles Esserman in 1987, said a source close to the deal. “TSG pioneered the use of private equity in high-growth, middle market branded consumer companies,” the statement said. “It was also the first significant private equity fund to focus on investing in natural and organic foods companies, functional food and beverage categories and orphan brands in the personal care and household sectors.”

TSG’s previous investments have included Famous Amos, Terra Chips, Arrowhead Mills, MET-Rx Nutrition, Mauna Loa macadamia nuts and Smashbox Cosmetics.

TSG’s previous fund, TSG4, closed in September of 2002 at $500 million. Investments from that fund included Smart Balance Foods, a maker of products designed to improve cholesterol and PureOlogy, a manufacturer of haircare products. Another investment was in Glacéau, a maker of “vitamin water” and “smart water”. TSG made 14 times its investment when it sold Glacéau to Mumbai, India-based Tata Group for $677 million in August.