Prelude Growth Partners, launched by former L Catterton and J&J executives, has closed its debut fund on $80 million for growth investments in consumer brands.
Launched in the fall, Prelude Growth Partners I LP surpassed its $50 million target during its four-month fundraise. Investors included university endowments and charitable foundations, and other prominent institutional investors. Prelude did not use a placement agent. “We’re thrilled with our leading investor base,” said Neda Daneshzadeh, co-founder of Prelude.
The fundraising comes at a point of disruption in the consumer sector. New brands are scaling more rapidly than before, while Millennials are searching for different products, said Alicia Sontag, co-founder. Technology also is offering new channels of distribution, she said.
“The top brands of tomorrow will be markedly different than the top 10 brands of today,” Sontag said. “We’re here to power those new brands with capital and operating support.”
Sontag and Daneshzadeh, who first worked together at McKinsey & Co in the early 2000s, hope to battle the high prices in the current M&A market with nearly 40 years of combined consumer experience.
Sontag is the former global president of beauty at Johnson & Johnson Consumer Cos. Daneshzadeh is an ex-partner at L Catterton, the consumer buyout shop, where she worked from 2005 to 2017.
They founded Prelude, a growth-equity firm, last year. “The DNA of our firm is really investing plus operating experience,” Daneshzadeh said.
Prelude, New York, will provide growth capital and operating support to consumer brands. The firm can take both minority and majority positions, although most of its deals will be for minority stakes, Daneshzadeh said. The firm will seek to invest $5 million to $15 million equity in companies in consumer sectors including beauty, personal care, health & wellness, food, beverage and pet.
Prelude’s first fund will aim to partner with a small group of brands, where it can be active and add value, Daneshzadeh said.
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Alicia Sontag (left) and Neda Daneshzadeh. Photos courtesy of Prelude Growth Partners