Yellow Wood Partners has raised $370 million for its oversubscribed second fund. Yellow Wood Capital Partners II LP will focus on the consumer sector, making investments between $50 million and over $150 million apiece. Park Hill was placement agent while Proskauer Rose LLP served as legal counsel.
BOSTON, July 27, 2017 – Yellow Wood Partners, a leading private equity firm focused on investing in consumer brands and companies, today announced that it has completed fund raising for its oversubscribed Yellow Wood Capital Partners II LP, with $370 million of committed capital.
Yellow Wood Fund II will pursue the same investment strategy it has employed since inception, partnering with management teams in North America and applying its operational and financial resources to transform brands and companies into category leaders. Yellow Wood seeks to invest the new fund in a limited number of platforms, probably no more than five, in the consumer sector. This focused investment strategy allows the firm to concentrate its resources in working with management teams to build out their companies through operating initiatives as well as acquiring additional brands to grow and diversify their product offerings. Industry categories targeted for investment span the consumer sector and may include Beauty & Personal Care, Health & Wellness, Household, Food & Beverage, and Pet Care among others. Targeted equity investment for each portfolio company will be between $50-$150+ million.
Dana Schmaltz, Founding Partner of Yellow Wood Partners, said, “The successful completion of Fund II is an important milestone for Yellow Wood. It is our belief that overachieving our targeted fund raise supports the strategy we set out to implement six years ago, to build a firm that invests and manages brands as operators who have built, and not just invested behind, consumer brands. Our small group of sophisticated limited partners are true partners in this strategy as we have sought to form a stronger alignment of our interests. We appreciate their support and commitment to Yellow Wood and we look forward to working with them to achieve our mutual goals. As our success with PDC Brands shows we believe there is a great opportunity to build a limited number of great portfolio companies where our team can enhance the success of consumer brands to drive exceptional returns for our investors.”
Tad Yanagi, Partner at Yellow Wood added, “We start Fund II with a strong pipeline of investment opportunities. Over the last five years we have continued to expand our outreach to entrepreneurs as well as to the financial community that understands how Yellow Wood can bring our combined operating and investment experience to acquire and grow consumer brands. 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 recently completed the $1.425 billion sale of PDC Brands, a rapidly growing provider of beauty, personal care, and wellness brands, after quadrupling the company’s revenue and growing EBITDA by over five times. During Yellow Wood’s ownership, PDC completed five exclusive acquisitions adding nine additional growing brands to the platform.
Fund II includes a small group of eight sophisticated institutions, including a number of large university endowments, foundations and institutional investors, a number of which are returning Limited Partners of the firm. Park Hill assisted the firm as Placement Agent for certain of the limited partnership interests. Proskauer Rose LLP served as legal counsel.
About Yellow Wood Partners
Yellow Wood Partners is a Boston-based private investment firm that invests exclusively in the consumer industry in the middle market. The firm seeks to acquire branded consumer products across a variety of channels including mass, drug, food, specialty, club and e-commerce. Yellow Wood’s success in driving growth and operational efficiencies is based on the team’s combination of investment expertise and complementary marketing, sales, finance, operations, and international skills. The goal of this operational approach is to form strong partnerships with the management teams of portfolio companies to drive exceptional returns for all of its stakeholders. For more information, please visit www.yellowwoodpartners.com.