The new world of ‘direct transactions private investments’ and how one private equity vet is using the strategy to revive Care Bears

A nostalgia for iconic brands is in the air, and it’s lucrative.

Take for instance, Barbie. Greta Gerwig, director of Barbie, the live-action movie distributed by Warner Bros., created a modern take on the fantastical world of Mattel’s iconic doll, exceeding $1 billion at the global box office this month. The satirical blockbuster is filled with social commentary that makes you laugh out loud but also leaves you thinking about significant underlying messages—like the need for more gender diversity in corporate boardrooms. There are no women in Gerwig’s fictional version of Mattel’s board, led by a wacky CEO character played by actor Will Ferrell. (Mattel’s board in real life does have female directors.)

Now, there’s another toy from decades past that’s getting a reboot with hopes of a big ROI. Think “Care Bear Stare.”

“The Target-trained marketing genius who helped move $16 billion in Harry Potter movies and merch has a nascent new project: Reviving Care Bears,” explains a new Fortune piece by my finance colleague Shawn Tully. He delves into how this move represents a new area known as “direct transaction private investments.”

Back in 1997, when George Jones was the chief of licensing and retail at Warner Bros., he read Harry Potter and the Sorcerer’s Stone for the first time and saw the potential for a brand and major success.

“Jones and his team heavily championed and launched one of the most lucrative movie-plus-marketing twofers in showbiz history,” Tully writes. “The Wizarding World series—starting with Harry Potter and the Sorcerer’s Stone in 2001—now ranks as the fourth highest-grossing cinematic franchise ever, at nearly $10 billion, and Harry Potter–branded offerings, from clothing to cosmetics to sweets, form a mainstay of Warner Bros.’ $6 billion-a-year consumer products business.”

Now through his own firm, Jones is taking out the playbook he used at Warner Bros. to bring back the beloved but modestly sized Care Bears brand. 

“On Aug. 24, IVEST—the private equity outfit that Jones cofounded—announced its purchase of Care Bears parent Cloudco Entertainment for $100 million, and now owns the collection of roly-poly, pastel-tinted cuddlies sold in the ‘plush’ sections of Walmart and Target,” Tully writes. 

“The Cloudco deal fits into IVEST’s game plan of purchasing and recharging middle-market consumer goods manufacturers, licensors, and retailers,” he writes. “It’s a major player in a new area known as ‘direct transaction private investments,’ or ‘directs.’ Instead of following the Blackstone or KKR model of acquiring enterprises that they gather in a large fund of, say, 12 holdings, ‘direct’ sponsors such as IVEST raise money from family offices that then hold the majority of shares. That template appeals to those super-wealthy clans because they can handpick deals one by one instead of owning part of a big pool containing numerous holdings they had no role in choosing.”

You can read more here about Jones’ plans for the Care Bears along with how strategies he learned from his time at Target creating a “different big box.”

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Kenneth “Ken” Parks was named CFO at GE Vernova, effective Oct. 2. Parks brings extensive public company CFO experience and 38 years of comprehensive financial leadership to the role. Most recently, he served as CFO for the global building materials producer, Owens Corning (NYSE: OC). Before Owens Corning, Parks served as public company CFO at global companies Mylan and Wesco International (NYSE: WCC). He was previously divisional CFO at United Technologies Corp (UTC) Fire & Security and also served for three years as director of investor relations. Parks held finance roles at Carrier Corporation and York International and began his finance career with Coopers & Lybrand.

James Coogan, SVP and CFO at Kaman Corp. (NYSE:KAMN) will step down from his role as CFO effective Aug. 28. Carroll Lane, SVP, Kaman Corporation and segment lead of engineered and precision products, will serve as interim CFO until a permanent successor is appointed. Coogan, who is departing Kaman to pursue another opportunity outside the aerospace and defense industry, will remain with the company until Oct. 23 for a transition period. Kaman has initiated a search to identify the company's next CFO with the assistance of an executive search firm.

Have an upcoming CFO move you'd like to be considered for an exclusive in CFO Daily? Send me an email. 

Big deal

A global generative A.I. benchmark study by Lucidworks is based on the insight from over 6,000 employees involved in A.I. technology decision-making. Ninety-three percent of companies across multiple industries plan to increase their investments in A.I. within the next 12 months.

The financial services industry is aligned, with 94% planning to boost generative A.I. investments within the year. However, the survey found differences depending on location. All of the Chinese financial services employees surveyed and 97% of U.K. respondents surveyed said they plan to increase investment, compared to 91% of U.S. companies, according to the report. 

Courtesy of Lucidworks

Going deeper

"Understanding U.S. Banks' Annual IT Spend," a report released by Integris, finds that more than 80% of banks surveyed intend to increase their IT investment by 10% or more in 2024. Cybersecurity remains a top priority for IT spending among 30% of U.S. Banks. Not a single financial institution plans to reduce spending among 2,271 the executives surveyed, according to the report. The research found that more than one-third of respondents at U.S. banks are not confident in their current IT budget, with 86% indicating room for improvement.

Overheard

"We have tightened policy significantly over the past year. Although inflation has moved down from its peak—a welcome development—it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."

—Federal Reserve Chair Jerome Powell said in his speech during an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyo., on Aug. 25.