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Yellow Wood racks up $750m for third fund

Yellow Wood Partners has closed its third fund at a hard cap of $750 million.

Yellow Wood Partners has closed its third fund at a hard cap of $750 million. Yellow Wood Capital Partners III’s limited partners include university endowments, family offices and other institutional investors. Proskauer Rose LLP serves as legal counsel on the fundraising while Park Hill was placement agent for certain of the limited partner interests in Fund III. Based in Boston, Yellow Wood invests in consumer brands and companies.

PRESS RELEASE

BOSTON, March 29, 2022 – Yellow Wood Partners, a Boston-based private equity firm focused on investing in consumer brands and companies, today announced the closing of Yellow Wood Capital Partners III, L.P., at its target and hard cap of $750 million of limited partner capital commitments. The new fund was oversubscribed and included capital commitments from many of Yellow Wood’s long-time limited partners as well as the addition of a small number of new investors comprised of university endowments, family offices and other institutional investors. Yellow Wood Fund III continues its strategy of partnering with management teams to grow and operate brands by applying its Consumer Operating DNA to transform brands and companies into category leaders within the consumer space.

Dana Schmaltz, Partner at Yellow Wood, said, “We had very strong demand from investors in our previous funds who continue to support us with higher commitments and we are very pleased to complete Fund III with the addition of a small and select group of highly sophisticated new investors to the Yellow Wood family. Our investment focus remains the same as it has been for more than a decade as we seek to find and work with brands to help them grow. As we have done and continue to do with our existing portfolio of brands, this successful fundraise allows us to continue our pursuit of building a limited number of platforms where we can apply our intense operating focus in close collaboration with entrepreneurs and management teams to create value for our shareholders. We want to thank all of our LPs who support us.”

Yellow Wood recently completed its first investment from Fund III with the formation of sexual wellness platform Beacon Wellness Brands, which markets and sells sexual wellness devices under the PlusOne® and Deia brands. The PlusOne brand is the leading brand in the retail channel, selling its products through retailers including, Target, Walmart, CVS, and Walgreens. Beacon Wellness also has a personal care division and manufactures facial skincare and grooming products sold under the Plum Beauty™ and Clio® brands.

Commitments to Fund III came from a small group of large, sophisticated university endowments, foundations, private pension funds, financial institutions and family offices. The Yellow Wood team is comprised of 14 investment professionals and seven operating partners.

Tad Yanagi, Partner at Yellow Wood, added, “We invest in a dynamic consumer goods sector that continues to experience dramatic growth, even during the current challenging environment as the global pandemic has impacted consumer consumption of most brands. Our Yellow Wood team is well positioned to continue to identify high-growth companies as well as complex corporate carve outs where we can partner with management teams to build market leading brands into true global businesses.”

Yellow Wood’s diverse portfolio of consumer brands includes leading global footcare brands Dr. Scholl’s and Scholl, which Yellow Wood reunited as one entity after 30+ years of separate ownership and now combined generates annual retail sales exceeding $700 million. The firm’s portfolio also includes Real Techniques and EcoTools, self-tanning brands Isle of Paradise, Tanologist and Tan-Luxe, and skincare brands Freeman Beauty and the recently launched BYOMA as well as the sexual wellness brands PlusOne and Deia, beauty brand Plum Beauty and personal care brand Clio.

Yellow Wood completed its prior fund in 2017, which was oversubscribed with $370 million of limited partner capital commitments.

Proskauer Rose LLP serves as legal counsel to Yellow Wood and advised the firm in its fundraise of Fund III. PJT Partners LP (Park Hill) served as placement agent for certain of the limited partner interests in Fund III.

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 that sell into a variety of consumer channels, including mass, drug, food, specialty, value, club and e-commerce. Yellow Wood’s investment and operating strategy is based on utilizing the firm’s Consumer Operating DNA strategy which brings functional operating resources to maximize brand performance by driving organic growth and increasing operating efficiencies in a limited number of platform entities which also incorporate highly accretive add-on acquisitions to drive growth and increased equity value. For more information, please visit www.yellowwoodpartners.com.