December 6, 2006 By Kelly Holman The Deal TSG Consumer Partners LP said Wednesday, Dec. 6, it wrapped up fundraising for its fifth private equity pool with $875 million in commitments. The State of Michigan Retirement System, the New York State Teachers' Retirement System and other institutional investors are limited partners in the new vehicle, which is bigger than TSG's previous fund by $375 million. Charles Esserman, a co-founder and chief executive of TSG, said the fundraising was testament to "the fact that experience, as well as a long-term track record of success, really matters." The firm, which has offices in San Francisco and New York, specializes in acquiring and building high-profile, consumer-oriented companies spanning sectors from food to personal-care products. Its investments have included Terra Chips, Famous Amos Cookies, Glaceau VitaminWater, Met-Rx USA Inc. and Smashbox Cosmetics brands. The new fund will make investments ranging from $25 million to $200 million in middle-market businesses, typically valued at $75 million to $300 million. TSG Consumer Products is focused on consumer companies — in May 2005 the firm, then called the Shansby Group, adopted its current name to underline that fact. But it will invest both in healthy businesses and in turnaround situations, according to Esserman. He said TSG generally puts modest leverage into its deals, which have an average hold period of five years. TSG has generated internal rates of return amounting to 59% annually since 1987, according to Esserman. Along with Esserman, TSG's managing partners include James O'Hara, Alexander Panos, M. Hadley Mullin and Yasser Toor, as well as chairman and co-founder J. Gary Shansby. Principal Clarence Schwab oversees the firm's New York office, according to the firm's Web site. In September, TSG sold GFA Brands Inc., the marketer of Smart Balance and Earth Balance margarine, to special purpose acquisition company Boulder Specialty Brands Inc. for as much as $500 million. That deal followed by a month the $677 million sale of TSG's 30% stake in Energy Brands Inc. to India's Tata Group. Copyright © 2008 TSG Consumer Partners. All Rights Reserved.