VMG Raises $850 Million for Food and Beverage, Wellness Bets

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Private equity firm VMG Partners has raised $850 million for a new fund dedicated to making investments in fast-growing consumer companies.

The vehicle, known as VMG Partners V LP, will seek to make bets in the food and beverage, wellness, pet and beauty and personal care industries.

“Due to the pandemic, consumers have a heightened awareness of health and wellness, which we think will continue,” Wayne Wu, one of VMG’s four general partners, said in an interview.

VMG writes equity checks of less than $10 million to more than $100 million, Wu said. The firm has a “first time right” mantra that it applies to establishing business models and hiring within its portfolio companies, which include beverage maker Spindrift and Daily Harvest, a delivery service focused on frozen, plant-based foods and drinks.

The firm seeks to capitalize on consumer trends and touts itself as a resource for global packaged-goods providers, many of which have acquired or bought majority stakes in VMG’s portfolio companies. They includes nut-butter specialist Justin’s which was acquired by by Hormel Foods Corp.; Sun Bum, bought by SC Johnson; Perfect Snacks, backed by Mondelez International Inc.; Drunk Elephant, acquired by Shiseido Co.; and Nature’s Bakery, bought by Mars Inc.-owned Kind, which itself counts VMG as an early investor.

Although the pandemic has accelerated e-commerce purchasing, VMG are “firm believers” in omnichannel retailing and believes brick-and-mortar stores will continue to play a major role, said Wu. “Consumers want to buy products wherever they go,” he said.

San Francisco-based VMG, which is overseen by general partners Mike Mauze, Kara Cissell-Roell and Robin Tsai and Wu, has assets under management of about $2.6 billion including the latest fund. Backers of the new vehicle include pension funds, endowments and family offices, among others. The firm has pledged to spearhead more diversity and inclusion in the consumer packaged-goods sector.

©2021 Bloomberg L.P.

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