A new private equity firm wants to invest in cosmetics and personal care

By Deanna Utroske contact

- Last updated on GMT

A new private equity firm wants to invest in cosmetics and personal care

Related tags: Private equity firm, Investment

Founders Neda Daneshzadeh and Alicia Sontag announced the launch of Prelude Growth Partners at the start of this month and are on the lookout for “high potential, fast-growing consumer brands” in the beauty business.

The firm isn’t focused exclusively on beauty brands, but the industry is of great interest to Prelude Growth Partners. And the expertise of founders Neda Daneshzadeh and Alicia Sontag suggests the team will bring a tremendous advantage to fragrance, cosmetics, and personal care brads poised for exponential growth.

Backstory

Daneshzadeh has worked for some 12 years with the world’s largest consumer-brands focused private equity firm, L Catterton (which, as Cosmetics Design reported​, arrived on the scene in its current form in mid-2016). There her most recent role was two-fold, partner and member of the firm’s investment committee.

Last June, L Catterton invested $30m in the prestige color cosmetics brand Il Makiage. As Cosmetics Design noted at the time “funding prestige beauty is part of the firm’s strategy. And, L Catterton has to date invested in manufacturers and brands including the probiotic product line TULA​, Bliss, Cover FX, CLIO Professional, Intercos Group, and StriVectin.”​ 

Sontag was most previously global vice president of beauty at Johnson & Johnson, overseeing some 10 brands including Neutrogena, Aveeno, and OGX. Before that, Sontag worked for The Estée Lauder Companies, in senior roles with brand like Bobbi Brown and Clinique.

The two women met years back while working at the global management consulting firm McKinsey & Company. Commenting to the press about the firm they’ve just launched together, Daneshzadeh says, “We are excited to launch Prelude and are confident that our complementary experiences, strong industry relationships and deep operating know-how both at the firm and through our world-class operating advisors will enable us to capitalize on the secular changes in the consumer sector.”

“Central to Prelude's investment thesis is our belief that a highly active and value-added investing approach will lead to a structural advantage in sourcing new investments and driving growth at our portfolio companies,” ​says Daneshzadeh.

Financial futures

The new private equity firm has its headquarters in New York City. And is “focused on providing capital and value-added operating support to high potential, fast-growing consumer brands,” ​according to the press release. Prelude aims to invest in category disrupting brands, led by passionate founders in personal care and beauty, in wellness, in food and beverage, in baby, in pet, and more. 

The firm’s initial plan is to invest between $3m and $10m in each consumer brand it works with. Which companies Prelude works with will be determined in part by the firm’s operating advisors like Maureen Chiquet who served as global CEO of Channel; Laura Lang who has held the chief executive post at Time and Digitas; Jennifer Fleiss, CEO of Code Eight and co-founder of Rent the Runway; and Lauri Kien Kotcher, CEO of Hello Products; among others.

Remarking on the potential of private equity investing in the current economy and the future of consumer brand, Sontag says, “There has never been a more compelling time to invest in high potential, fast growing consumer brands. Today, we are seeing new consumer brands scale more rapidly than ever before as a result of a modern generation of consumer demand and changing market dynamics.  Across categories, we expect the top 10 brands of tomorrow to be markedly different than the top 10 brands of today.”

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