L Catterton launches impact fund platform with industry and ex-Bain execs

The consumer-focused private equity firm has brought on Harry’s chief growth officer Tehmina Haider and Engine No.1’s Michael O’Leary as partners to lead the strategy.

L Catterton has launched an impact fund platform to capitalise on consumers shifting buying patterns and allegiances to brands based on sustainability, inclusivity and equitability.

The consumer-focused private equity firm, which has over $33 billion of equity capital across its fund strategies, has brought on Tehmina Haider and Michael O’Leary as partners to lead the strategy.

Haider: re-joins L Catterton to lead its impact strategy

Haider re-joins L Catterton from men’s personal care company Harry’s where she was chief growth officer. She was previously a principal at L Catterton where she spent over four years. O’Leary joins from activist and impact-focused investment firm Engine No. 1 and was previously a founding team member of Bain Capital Double Impact. The platform is L Catterton’s ninth fund strategy.

“We have consumers who are radically changing their behaviours… You can see this if you measure it over the course of the last decade. Consumers increasingly care about these issues and are voting with their wallets,” O’Leary told Private Equity International.

L Catterton, which carries out primary research on roughly 500,000 consumers a year, has noted a shift in sentiment from individuals within the millennial and generation Z generations.

The Greenwich-headquartered firm’s impact strategy will look to invest and grow consumer businesses that mitigate climate change, reduce waste and preserve nature; eliminate disparities in health, wellness and nutrition; and create a more inclusive economy by expanding access to the financial system and improving education and workforce development, according to a statement about the launch.

Dahnke: L Catterton has made a number of impact-oriented investments

To date, L Catterton has made a number of impact-orientated investments, the firm’s global co-chief executive, Scott Dahnke, told PEI, listing investments such as plant-based products company NotCo and Planted, a producer of meat made from alternative proteins. It also owns Birkenstock, a footwear brand that uses sustainable materials sourced across Europe; has invested in Tula, which offers clean beauty products; and has agreed to acquire Mexican lending platform Crediclub, which seeks to drive financial inclusion.

Its fashion brand Ganni became B corp certified last month. The certification is issued by non-profit network B Lab, given to businesses meeting high standards of verified performance, accountability and transparency.

L Catterton has invested in companies focused on impact themes and has helped those businesses continue to act consistently with those themes, Dahnke said.

The firm’s impact investment platform will look to make investments with impact at the forefront, O’Leary added, noting the bar set by organisations such as the Global Impact Investor Network. “It’s not just a happy accident that you’ve created jobs or you’ve done something for the environment. It was the goal going into the investment and similarly there is measurement against that goal.”

O’Leary: consumers are radically changing their behaviours

It will also consider what L Catterton will bring to the stakeholders of the business to deliver impact beyond just capital.

When asked how large the platform could become, Dahnke said the emphasis will be on differentiated returns and where L Catterton can offer competitive advantage.

“What’s really important is that it enables us to make investments that are distinctive, special, have great returns and are consistent with what we’ve historically delivered,” he said.