VMG To Close Debut Consumer Products Fund

Firm: VMG Equity Partners

Fund: VMG Equity Partners LP

Target: $300 million

Placement Agent: Park Hill Group

Industry Focus: Consumer Products

VMG Equity Partners, a consumer products-focused buyout firm, is expected sometime this month to hold a final close on its inaugural fund, Buyouts has learned.

The fund, VMG Equity Partners LP, has a $300 million target, according to meeting minutes published by the New Mexico State Investment Council. The pension fund approved a $30 million commitment to the fund in April 2006. As of March 2007, VMG had about $180 million in commitments lined up, and was nearing a final close, a source told Buyouts. New York-based placement agency Park Hill Group said in 2005 that it was working with VMG to raise money.

The San Francisco-based firm buys branded consumer products companies in the lifestyle, wellness, food and beverage, personal care, pet and leisure sectors. Ideal targets generate revenues of between $10 million and $100 million.

Buyout activity has been rampant in the market. In the first three months of 2007, consumer products deals made up about 8 percent of all buyout transactions sponsored by U.S. firms, according to information compiled by this publication.

VMG’s acumen in consumer products can be traced to VMG’s co-founders—Scott Elaine Case, Michael Mauzé and Robert Schult. All came from The Shansby Group, which, in 2005, changed its name to TSG Consumer Partners.

David Baram is the only VMG co-founder that did not come from TSG Consumer Partners. He is also president of The Firm, a Los Angeles-based consumer brand development, intellectual property company, and talent agency.

Founded in 2005, VMG boasts one portfolio company—bicycle messenger bag and computer carrying case manufacturer Timbuk2 Designs Inc. The firm acquired the company in partnership with Capital Logic Partners.

But the team naturally has a track record beyond the one deal. Richard Ellman, a partner with Aldus Equity Partners, which advised the New Mexico State Investment Council to invest in VMG’s inaugural fund, said that the co-founders have invested $250 million in consumer products deals, generating a 32.9 percent IRR and a 2.7x ROI (according to the pension fund’s April 2006 meeting minutes). Ellman was likely alluding to deals the team did with TSG Consumer Partners.—A.N.