Barstool Sports-backer TCG Capital closes Fund 3.0

TCG Capital, the investment firm formed by Peter Chernin, the former number two at News Corp, has closed its flagship commingled fund on $1.3 billion, beating its initial target, a source told Buyouts.

Fund 3.0 also exceeded its hard cap, which required approval from LPs, sources said.

TCG straddles the line between venture capital and growth equity, backing young and aggressive companies like Barstool Sports, Exploding Kittens and Goldin Auctions. It looks for brands with distinct customer loyalty with the ability to monetize that relationship through products, subscriptions and events.

The firm worked with PJT Park Hill on the fund, which it called TCG 3.0. TCG closed its first broadly marketed, traditional private equity fund, which it called TCG 2.0, on more than $700 million in 2019. Prior to Fund 2.0, the firm used a holding company-type structure.

In May, the firm led a $263 million strategic investment in Funko, a publicly listed pop culture lifestyle brand. The consortium acquired about 80 percent of the interest in the company owned by ACON Investments, according to a statement.

Chernin formed TCG Capital Management in 2018 with Jesse Jacobs, Mike Kerns and Jason Bergsman. Chernin, Jacobs and Kerns are principal owners of TCG Capital Management, according to the firm’s Form ADV.

Bergsman left TCG Capital in 2020 to become CEO of AGBO, an entertainment company formed by directors Anthony and Joe Russo, according to a statement from the company.

Earlier this year, TCG Capital hired Max Kalman, an executive at PJT Park Hill, as global head of capital formation. It also promoted Lauren Goldberg, who joined the firm in 2015, to partner, chief operating officer and general counsel.

As of December 31, TCG Capital managed about $3 billion, according to the firm’s Form ADV.

The firm searches for certain characteristics when backing a company, Chernin told Bloomberg in a prior interview. It wants brands that are authentic and whose owners have authority and expertise, that have built a fan base organically and not by paying up for advertising on social media. And importantly, the fan base needs to have demonstrated a willingness to pay for things associated with the brand, including products, subscriptions or even live events.

Chernin was president and chief operating officer at News Corporation, climbing the ranks to eventually become second in command to Rupert Murdoch, the New York Times previously reported. He was also chairman and chief executive officer of Fox Group. With Fox as co-owner, Chernin launched Hulu, his biography said.