Traub Capital Partners is making it official — closing its inaugural fund and indicating it’s ready to make plans to buy two or three more consumer companies.
The private equity firm, a sister company to the Traub consulting firm, has already signed two deals worth a combined $400 million, including Signature Brands, maker of food decoration pillars PAAS and Pumpkin Masters, and prestigious beauty lab and manufacturer Mana Products.
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With the dots on the i’s and the t’s crossed on the fund’s paperwork, the fund has $173 million under management and aims to invest in brand-driven companies with annual revenues between $50 million and $250 million and profits before interest, taxes, depreciation and amortization of approximately $15 million.
“We don’t go after unicorns, we don’t chase shiny objects,” said Mortimer Singer, managing partner. “We hunt for companies with a proven track record, that have a proven consumer profile and, quite frankly, brand equity that has been acquired over decades and that has not been financed with venture capital for many years.”
Singer co-founded Lurie Traub Capital with Brian Crosby and Geoffrey. David West joined as general manager this year.
The group is now out to put a new spin on the investment game with a 10-year mindset and an eye for controlling stakes in companies that are solid but could use a little refreshment.
“We’ve built and are building what we still believe is a new kind of private equity fund,” Singer said.
The company can use the resources of the consultancy for its investments.
Singer called them “sister companies” and said, “They’re symbiotic.”
That may have helped one hand the other to find the best values in the market and also help established players chart a new course for the future.
Singer is looking for a highly collaborative approach with the company that takes stakes in companies that change hands, but have management present.
He described Traub Capital as “the infantry air force of the management team” and a partner who “would appear not only quarterly, but there as their peers, by their side to help them navigate all areas of their business.”
Traub Capital is on the prowl in food and personal care, where it has already invested, as well as in what Singer described as “enthusiastic companies” in fashion, reflecting the active lifestyle space.
Singer said the fund could hold two or three more deals with capital employed from $25 million to $35 million, plus co-investments and “very little leverage.”
The company is seriously entering the investment space at a time of significant change.
For several years before the pandemic, the consultancy Traub divided the fashion world into Davids and Goliaths, bringing a exhaustive list of direct-to-consumer brands shake up the market and compete against the big players.
But now those big companies have learned the lessons of the upstart and are behaving more like their smaller d-to-c counterparts and the upstart is also borrowing from the establishment. Many of the newbies are in fact taking the next step and are 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 going arm and arm into the sunset now,” Singer said.
Traub Capital wants to make the most of both as it wants to push its investments into the future.
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