Private equity firm Alliance Consumer Growth (ACG) has raised $210 million for its third fund, its founders announced Wednesday, more than doubling the amount it raised in its last fund, just two years ago.
Nevertheless, ACG Managing Partner Josh Goldin told NOSH that the larger fund size won’t change the firm’s strategy of investing relatively small checks of $5-$25 million in fast-growing consumer brands, although it does give the group some flexibility to go beyond its initial investment.
Since its initial, $44 million raise in 2011, ACG has invested in fast-growing companies, including Krave Jerky (acquired by Hershey’s), Shake Shack (now publicly-traded) and Suja (which was invested in by the Coca-Cola Company). The firm’s track record created more inbound interest then space in the fund this time around, Goldin noted. The fund was largely composed of legacy investors from the the previous two funds, but was still oversubscribed, he said.
The timing is right for funds like ACG, he said, because “retailers and consumers really value innovation and products that deliver something different, you can get on the shelf and you can get consumers to try your product and trust you as a young company more and more today than ever before.”
While there is a strong restaurant theme in its current holdings, with Tender Greens and PDQ, among others, as part of the fund, current ACG investments in food and beverage companies include Bark Thins and Way Better Snacks. Although ACG doesn’t only look at brands operating within the natural space, to date all of its investments have fit that profile. Goldin says ACG simply looks for “truly exceptional innovators and brands that have raised the bar and created something better for consumers,” although at this point much of that attention lies in natural, organic, sustainable, or better-for-you brands.
When asked to what he attributes ACG’s great success in investments Goldin was thoughtful. “At the end of the day, the entrepreneurs are really the stars. We, above all, have been able to partner with great companies.”