Goode Partners Closes Debut Consumer Fund

Firm: Goode Partners

Fund: Goode Partners Consumer Fund I

Amount Raised: $225 million

Legal Advisor: Jones Day

Placement Agent: Champlain Advisors

Goode Partners has secured $225 million in commitments for a first-time fund geared toward buying small consumer companies.

The firm, headquartered in New York with a satellite office in Los Angeles, has between 12 and 16 limited partners, mostly institutional investors, including some financial institutions that in turn made commitments on behalf of clients, said Joe Ferreira, a Goode Partners co-founder, who declined to name any of the LPs. The firm’s placement agent was New York-based Champlain Advisors, which helped round out the LP base with select pension funds.

Goode Partners started fundraising in March 2006 with a target of $250 million. Limited partners, however, advised the firm to lower its hard cap to $200 million, given the shop’s focus on smaller targets, Ferreira said. The firm eventually added another principal, and LPs responded by allowing the fund’s cap to inch up to $225 million, he said. The firm now has 10 investment professionals.

The ideal target for Goode Partners is a company generating sales of $20 million to $100 million and a management team that wants to retain ownership of a significant portion of the company, Ferreira said. Typical equity checks range between $10 million and $30 million, but the firm has the ability to do much larger deals. About half of its LPs are interested in making co-investments. Some can cut checks of up to $40 million.

Target markets for Goode Partners include retail, direct marketing and restaurants. While the firm faced the typical hurdles involved in raising a first-time fund, Ferreira said the partners allayed many investor concerns by pointing to their operating experience. Ferreira, for instance, held a number of positions at Avon Products Inc., ultimately serving as co-chief operating officer. Just before founding Goode Partners, he was CEO of the Woodclyffe Group, a consultancy specializing in the consumer products industry.

Another co-founder, David Oddi, came from LBO shop Saunders Karp & Megrue, where he was a partner and held board seats at Charlotte Russe Holdings and The Children’s Place. Ron Beegle, the third member of the founding triumvirate, most recently was chairman of Global Consumer Retail Investors, a consulting firm working exclusively with Credit Suisse’s private equity division. Before that, he held a number of management positions with May Department Stores Co., Saks Fifth Avenue, Broadway Stores Inc. and Gap Inc.

During its fundraising, Goode Partners used its own marketing savvy to burnish its name. In October 2006, it sponsored a one-day retail conference in New York featuring speakers such as Michael Gould, chairman and CEO of Bloomingdales, and Michael Silverstein, co-author of an influential marketing book. “We wanted to get right out there and establish our brand,” Ferreira said. “By the time we closed our fund people were looking at us as an established firm.”

The firm has already put some of its equity to work. In the last year, Goode Partners has bought Tex-Mex eatery Chuy’s, home décor retailer Rachel Ashwell Designs, ultra-luxury glasses frames retailer Luxury Optical Holdings, and women’s apparel retailer Intermix.

Incidentally, Goode Partners has other ties to Saunders Karp & Megrue. Its advisor staff includes Thomas Saunders, co-founder of that firm. Also, when Saunders Karp & Megrue merged with the U.S. buyout business of Apax Partners in 2005, Goode Partners took over the abandoned office space on Madison Avenue in New York.—M.C.