John Lowe loved his time at Jeni’s Splendid Ice Creams so much that he wants another bite at an early-stage growth company.
The former CEO of the chain, who joined the company early in its history, has formed a new private-equity group, Amok Consumer Growth Fund. Its goal: Find other early-stage growth companies in the restaurant and consumer packaged goods (CPG) sectors and guide them to the next stage, one in which they become a target of a larger investment firm.
“We had a great run,” Lowe said of his time at Jeni’s. “I loved my time there. As I decided to step out of the CEO role and become a board member, I dreamed of getting to do that all over again. It’s where the fun is. It’s an exciting time.”
Lowe’s career trajectory has not been what one would call conventional, at least in the restaurant world. He worked with GE for many years in the aviation business and during the financial crisis of 2008 did a lot of merger and acquisition work.
“It was a wonderful job professionally,” he said. “Personally it was taking a huge toll. I moved five times in eight years.”
He then got the opportunity to jump to Jeni’s. The brand at the time had four shops and $1.2 million in annual revenue.
Lowe guided the chain for 14 years, until it had more than 90 shops and $150 million in revenue. It also sells pints of ice cream in grocers in all 50 states.
“I met a number of entrepreneurs along the way that needed the same help Jeni’s needed,” Lowe said. “I assembled a team, raised money and now we’re ready to jump in with early-stage brands.”
That team features people from the restaurant, CPG and investment industries, including Rachelle Lynch, a Jeni’s alum who has also worked with companies like Burt’s Bees and Plum Organics. Timmy McCarthy was the first franchisee of Raising Cane’s and grew his portfolio to 44 locations. Ryan Parish spent 25 years in investment banking and private equity.
The goal, Lowe said, is to find good, proven companies that need help getting to the next stage. Amok is targeting restaurant chains with two to 10 locations, with a proven product and which have demonstrated they can successfully operate multiple units. Those concepts typically need capital to grow further.
Amok is also looking for CPG companies that have established themselves as a regional niche but also need capital and expertise to grow further.
“We think of ourselves as an early-stage private-equity growth fund,” Lowe said. “We are not a venture fund. We are not betting on a bunch of good ideas and hoping that two of them go to the moon and it makes up for all the losses.
“We are picking winners. Things that are already proven. Then we’re coming in with capital and experience. Our model is to help them get big enough so they can receive a much bigger investment from a bigger private equity fund.”
To be sure, this isn’t necessarily a great time to be banking on restaurant industry growth. A number of larger private-equity firms that have traditionally invested in restaurants are walking away from some of their investments after years of financial challenges.
But Lowe also believes this is an opportunity. He doesn’t think these firms will remain out of the game forever.
“The industry has been through a reset over the last two to three years,” Lowe said. “But there’s more than $3 billion in dry capital in these premier private-equity funds just sitting on the sideline because everybody is trying to figure out where the new valuation metrics are.”
“It’s a wonderful time to be entering the market and begin growing companies,” he added, “because three, four or six years down the road when interest rates are closer to historic norms and the market has stabilized, those premier private-equity funds will be back looking for companies to invest in.”
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