NEW YORK, United States — Women drive the economy. But they rarely drive private equity, a business that's reshaped economic life for millions.

Which is why what’s happening at TSG Consumer Partners, a private-equity firm with about $3 billion in assets under management, might seem so surprising.

TSG, established in 1987, has made its name by successfully investing in consumer brands, an area in which women — who control 80 percent of household purchases — are the ultimate deciders.

Now TSG is pushing into fashion, another business whose customers are overwhelming female — and depending on several women dealmakers to help navigate the notoriously fickle industry.

“It’s very different to have a personal experience with a brand or a category,” said Jennifer Baxter Moser, a TSG managing director. “We’ve been walking the store floors and living in these categories for a long time.”

TSG is hardly setting out to fix the gender inequality problem in the 40-year-old private-equity industry. At the 10 biggest firms, only about 11 percent of senior managers are women. At TSG, that figure is almost 40 percent.

But Moser and Paula Sutter, chief executive officer of TSG Fashion, say they're well positioned to spot potentially lucrative investments in apparel and consumer goods. That's a tall order: These industries are littered with might-have-been's and used-to-be's, from American Apparel Inc. to Abercrombie & Fitch Co.

Buffett Approach

Yet in some ways Moser and Sutter are simply heeding the advice of Warren Buffett: invest in what you know. Moser, for instance, liked shopping at Revolve Clothing, an e-tailer offering L.A.-chic fashion. So much so that she persuaded Revolve to sell a piece of itself to TSG.

Many investment firms try out products and services before putting their money down. But when Revolve founders Michael Mente and Mike Karanikolas checked customer records, they discovered Moser was a regular customer.

“It makes a difference — it gives them an insight others don’t have,” said Karanikolas, 37. “They’re very close to the brands they represent.”

TSG began thinking about getting into apparel in 2007 but held off as the U.S. recession bit into consumers’ wallets. Moser said the firm needed time to review businesses and develop standards to measure their investment potential.

In addition to Revolve, TSG has taken stakes in Paige Denim and Alexis Bittar, a jewelry maker.

Smashbox Investment

The firm has done pretty well so far. After investing in Smashbox Cosmetics, it helped add new products and improve marketing. Sales tripled, and TSG sold its stake to Estee Lauder Cos. for an undisclosed price. TSG did similar work following a 2003 investment in Glaceau Vitaminwater.

TSG’s most recent fund, which finished gathering $1.3 billion in 2011 to make investments, was producing a 43 percent annualized return after fees as of March 31, according to data compiled by Bloomberg. That compares with a 19 percent annualized return, with dividends reinvested, in the Standard & Poor’s 500 index of large U.S. stocks during that time.

“As a private-equity firm, having women involved makes a lot of sense — they’re going to bring a different perspective,” said Randy Allen, senior lecturer of management at the Samuel Curtis Johnson Graduate School of Management at Cornell University. “They’re going do have a different view of analyzing a company for its potential.”

Gender Breakdown

Three of TSG’s eight-member senior leadership team are women. Including the company’s operating partners, who are actively engaged with groups of investments such as food, fashion and beauty, half of TSG’s top 12 executives are women.

After years of successful partnerships with consumer product companies, why get into the unpredictable and, lately, sluggish fashion business? It’s ripe for disruption, the TSG executives say. The firm’s strategy is to invest in industries where habits are changing. Shoppers are turning to social media and the Web to find fashion ideas and shop new brands.

At Revolve, the two founders have retained control and worked with Sutter to expand internationally, strengthen management and build out the private-label business. TSG has also helped Revolve think about what a sale or initial stock offering might mean for the company.

Revolve is now growing at 50 percent over last year — and TSG is still early into its typical five- to seven-year investment timeline.

As Revolve looks for its breakout moment, Moser and Sutter at TSG may help keep the company focused on sustainable growth, Cornell’s Allen said.

“Women bring a different dimension to thinking about those issues,” Allen said. “When you’re trying to build a fashion brand or a retail company, you need to make sure you have the foundation right before you grow the business rapidly.”

By Lindsey Rupp, with assistance from Devin Banerjee. Editors: Nick Turner, David Gillen.