TPG Growth-spinout Knox Lane unveils $500m inaugural consumer fund

The fundraising market is seeing yet another offering from a newly minted private equity shop: a San Francisco manager created by former senior executives of TPG Growth.

Knox Lane, launched in late 2019, recently rolled out a debut consumer-focused buyout fund with a $500 million target, according to a Form D fundraising document and person with knowledge of the matter. The hard cap was not disclosed.

KLC Fund I has already secured commitments from multiple limited partners, the source told Buyouts. The amount raised to date was not disclosed.

Knox Lane was founded by Managing Partner John Bailey and Partner Shamik Patel, both veterans of TPG Growth, the growth equity and mid-market buyout arm of TPG.

Bailey was a partner with TPG Growth, leading consumer investing, according to Knox Lane’s website. He left that role in 2015, his LinkedIn profile shows, to become president and CEO of elf Cosmetics, a makeup and beauty products brand. The company was acquired in 2014 by TPG Growth and two years later went public.

Bailey served on the boards of other TPG Growth portfolio companies, including Angie’s Artisan Treats, Beautycounter and Schiff Nutrition International. Before joining TPG in 2010, he was with North Castle Partners.

Patel was also a TPG Growth partner, leading investing in the services industry and contributing to consumer-related deals. He departed last year, his LinkedIn profile shows. Patel was a senior associate with Veritas Capital prior to going to TPG in 2012.

Two Knox Lane principals were also recruited from TPG Growth. David Coghlan was a vice president over 2018-2019, a position he took on after working with GTCR, while Brent Gunderson was a principal for seven years, their LinkedIn profiles show.

In addition, Jon Fieldman, a Knox Lane operating partner, was a senior executive with several TPG Growth portfolio companies, including elf Cosmetics. Rounding out the team is Vice President Allison Fulenwider, who previously worked with Castanea Partners.

Knox Lane will make control-stake investments in founder- and family-owned mid-market businesses in the consumer industry, according to the firm’s ADV filings.

Target opportunities are expected to include companies in food and beverage, personal care, beauty, consumer healthcare, nutraceuticals, contract manufacturing, residential services and broader consumer services. Knox Lane aims to write checks of about $50 million to $150 million per deal.

Fund I is charging an annual management fee of 2 percent and carried interest of 20 percent on realized profits in excess of an 8 percent compounded preferred return, the ADV filings show.

Knox Lane declined to comment on this story.

Action item: Check out Knox Lane’s ADV filings here.