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Because of the firm's diverse group of investors, TSM will develop business plans that assume exit in three to five years. Magnusdottir said that, because TSM's investments will be in fledgling companies, she sees TSM exiting the majority of its purchases through trade sales or traditional private equity buyout deals — though she did not rule out the possibility of future initial public offerings.
Late last month, TSM took a stake in London-based Matthew Williamson Holdings Ltd., a deal in partnership with investment firm Aronsson Group, which is headed by chairman Jeffry Aronsson. TSM is working on two other transactions with U.S.-based companies and expects to close the deals within the next six months. TSM is the investment arm of Iceland's Baugur Group, which owns U.K. fashion brands such as PPQ and All Saints, as well as the British department store chain House of Fraser.
So far, Magnusdottir said TSM has seen the greatest opportunities for investment in major fashion cities such as New York, Los Angeles, Paris and London. But TSM is looking globally. Magnusdottir points to markets such as India — where the women's accessories market has exploded as burka-wearing women look for ways to express themselves through fashion.
TSM did not disclose how much or what stake constituted its investment in Williamson, but Traub did take a seat on the company's board.
Aronsson summed up how investors tend to look at designers in the market. He told WWD that he's been "aware of Matthew Williamson over the years, but it has been at a distance." Aronsson also offered a glimpse of what an investor seeks in a designer.
"Only recently have my team and I had the opportunity, together, to become well acquainted with and to appreciate it as an exquisite brand rooted in Matthew's design artistry," Aronsson explained. "We became even more interested after having the opportunity to get to know Matthew and [ceo] Joseph [Velosa] and how they work off of each other. Together, Matthew and Joseph possess that rare and all-so-important balanced blend of art and science. The results of this balance and their bottom-line focus is reflected in another rarity: a profitable, designer-driven business poised for growth on a global basis."