A prominent private equity investor is facing challenges in locating successful British consumer brands to invest in, with nearly half of its £275 million fund remaining unallocated.

True, which has invested in companies like The Cotswold Company, a retail provider of home goods; War Paint, a cosmetics line for men; and Unmind, a platform focused on workplace mental health, established its £275 million private equity fund in July 2021.

Recently, True acquired a minority interest in the sportswear label Represent for an undisclosed amount, forming a partnership with the brand’s founders, brothers George, 31, and Michael Heaton, 33, along with the chief executive, Paul Spencer, 49.

Paul Cocker, co-founder and CEO of True, stated that the goal for Represent is to double its revenue in the coming years, but noted the difficulty in identifying similar companies with comparable potential.

“We have a significant amount of capital to invest, yet finding opportunities has proven to be quite challenging. Successful businesses are scarce,” he remarked.

The investor pointed out that many digital retailers have encountered difficulties in the wake of the online shopping boom spurred by the pandemic, citing issues with reduced cash flow stemming from over-ordering inventory based on the expectation of sustained consumer preference for online shopping.

The peak of online retail spending took place in January 2021, and although the cost of living situation is improving, consumer confidence remains low. Cocker emphasized, “We know from experience how tough it is to convince consumers to spend money right now.”

Looking ahead to 2025, Cocker expressed a cautious optimism about the consumer market improving. “After my recent investor call, I’m not overly optimistic, but I do see signs of improvement. Consumers now have more disposable income compared to a year ago, and the cost of living crisis is alleviating. However, we aren’t yet seeing consumers spend that extra income due to prevailing low sentiment.”

He remains optimistic about the digital retail landscape in the UK, stating, “With our significant e-commerce expertise, we face fewer logistical challenges compared to other nations, and the competitive nature of the UK market demands excellence from businesses. Represent is a prime example of a standout company in this respect.”

Represent ranked 68th on this year’s Sunday Times 100 list of the fastest-growing private firms in Britain, reporting revenues of £80.8 million, marking a 67% increase from the previous year, and pre-tax profits of £13.1 million. The brand anticipates surpassing £100 million in revenue this year.

True generally invests in “decent minority or small majority” stakes in the companies it supports. Cocker noted, “We seek to partner with businesses that are expanding, profitable, and poised to significantly grow post-investment. However, there are not many such businesses available in the current market.”

This year, Represent launched its first physical store in West Hollywood, Los Angeles, and another in Manchester, with plans for a third location in London set for next summer.