With more than 30 years of experience in the fitness world, Mark Hauser has an innate understanding of the hidden potential in the industry. As the son of Art Hauser, a retired Los Angeles Ram football player, Mark Hauser has always been interested in fitness and wellbeing. He has leveraged this knowledge and experience throughout his professional career and has successfully invested in several major projects within the industry.
Who is Mark Hauser?
Mark Hauser currently serves as managing partner at Hauser Private Equity (HPE.) After graduating from Miami University with a bachelor’s degree in business administration, Hauser joined the team at Cincinnati’s Reynolds DeWitt & Co. – a merchant banking firm involved with S-corporations and multiple partnerships. He joined the firm in 1985 and eventually served as a vice president.
In 1995, Hauser acquired a local Cincinnati insurance agency that is today known as HAUSER (Insurance Inc.) The firm provides risk management and benefits to clients nationwide, specializing in serving companies that have a private equity focus.
In 2008, Mark Hauser founded Hauser Capital Partners (HCP) to manage the investments held by a select group of executives. This partnership prompted the creation of Hauser Private Equity, a hybrid private equity fund manager that has built upon HCP’s model of directly co-investing throughout the lower-middle and middle markets via partnerships with control buyout funds and selectively with managers of growth equity and special situation funds. HPE’s four funds have invested more than $300 million in capital in privately owned businesses nationally across a diverse set of industries.
Focusing on Health and Fitness 30 Years Ago: Cincinnati Sports Club
In 1990, Hauser joined forces with Bob Castellini (owner of the Cincinnati Reds) to develop the Cincinnati Sports Club.
Initially, they coined the project the “Cincinnati Sports Mall,” and the initial concept was to create a “sports mall” atmosphere where residents could benefit from numerous sporting facilities in one location. Original tenants included the Cincinnati Sports Club, Hyde Park Gymnastics, Soccer 1, Strike 3 Batting Cages, Winners Café, P-Body’s Exercise Studio, Queen City Sports Medicine, and Koch Sporting Goods.
Today, the Cincinnati Sports Club is a 16-acre, 110,000 square-foot fitness, and lifestyle club. Amenities include a collegiate-sized basketball court, a large fitness room, spinning bikes, a circuit room, an indoor swimming pool, racquetball and tennis courts, and indoor athletics fields, to name a few.
The club offers a combination of health, medical wellness, and social programming, including more than 55 group fitness classes per week, children’s sports camps, and access to Tonics Salon and Spa. It is the official training facility for Major League Baseball’s Cincinnati Reds and part of the International Health, Racquet and Sports Club Association, the Medical Fitness Association, and the Club Management Association of America.
Hauser remains co-owner of the Cincinnati Sports Club, which recently celebrated 31 years of membership.
Hauser Private Equity’s Fitness Investments
Mark Hauser has continued his investments in the fitness industry through Hauser Private Equity’s four funds. The firm leverages the collective multi-industry expertise of its directors and limited partners to perform due diligence on targets, grow companies, and enhance returns. They have invested in and funded numerous projects dedicated to growing and improving the fitness industry. Hauser Private Equity’s portfolio includes investments in both big-box fitness and boutique studio fitness, as well as more recent investments in at-home fitness brands, such as Echelon Fitness. Through its fund partners, HPE has invested in operators of Planet Fitness, Crunch Fitness, Orange Theory, Curves, and Barry’s Bootcamp.
HPE Invests in Beacon Orthopaedics
In 2019, Revelstoke, with capital support from HPE, and Beacon Orthopaedics and Sports Medicine (Beacon), one of the largest medical groups in the Ohio tri-state region and a national leader in providing advanced orthopedic care, launched a national management services organization (MSO) to support Beacon’s growth and pursue additional partnerships with other leading orthopedic providers. These providers include professionals in orthopedics and sports medicine who help with the treatment and prevention of injuries related to sports and fitness, alongside other services.
Andy Blankemeyer, CEO of Beacon, reported, “We [launched] an MSO to leverage our expertise and patient-centric care model to become one of the nation’s premier orthopedic management companies.” MSO’s provide resources and administrative support for practices. This includes assisting with operational issues; financial management; credentialing and contract management; savings with group purchasing; risk management; human resources and personnel management; staff education and training; coding, billing, and collection services; discounts and provision of electronic health records (EHR) and medical equipment; regulatory compliance oversight and management; etc.
At the time of investment, Beacon had eight locations with roughly 550 employees. The transaction was intended to help Beacon grow by recruiting more providers, opening new clinical facilities, expanding patient care and business support services, and aligning with market-leading provider groups.
Andrew Welch, managing director at Revelstoke, said, “This transaction is a continuation of our multi-year outbound search effort to partner with leading physician practices in specialties that are well-positioned for growth and consolidation.” He continued, “Beacon has developed the infrastructure and capabilities to provide patients and payors with exceptional and cost-efficient medical care and services.”
Anthony Hayes, vice president at Revelstoke, stated: “Our interest in orthopedics is driven by both industry fragmentation and the opportunity to provide quality outcomes and value to patients and payors in such a large segment of the healthcare industry. We anticipate consolidation in this sector to accelerate and are actively seeking additional partnerships with other leading orthopedic groups to expand the MSO’s reach and capabilities.”
McGuireWoods, LLP, acted as legal counsel to Revelstoke, while Proskauer Rose, LLP, acted as legal counsel to Beacon. Coker Capital Advisors acted as financial advisors to Beacon.
HPE Invests in Elite Body Sculpt
That same year, HPE co-invested with Vesey Street Capital Partners (VSCP), LLC, a New York-based healthcare services private equity firm, in Elite Body Sculpture (EBS) and completed a recapitalization via funds managed by VCSP. Founded in 2012, EBS is a founder-led, innovative physician services business and leading provider of minimally invasive body sculpting procedures. EBS utilizes its patented, exclusive AirSculpt technology to provide the highest quality fat removal and transfer services.
In addition, EBS encourages clients to continue their healthy lifestyle by sharing insights into exercise and tips to stay fit at home. The company shares information on reducing body fat through a high-protein diet, better sleeping habits, cardio exercises, and caffeine supplements.
Dr. Aaron Rollins, founder and CEO of EBS, shared: “I chose to partner with the VSCP team because of their deep healthcare services expertise, their understanding of the value of the AirSculpt technology, and our shared goal of improving the lives of as many patients as we can.” He continued, “The future for EBS is incredibly bright, and I’m excited to continue leading the company as it embarks on its newest era of growth.”
Adam Feinstein, the managing partner of VSCP and chairman of EBS, said, “Very few healthcare services businesses combine a dynamic physician founder, an exemplary operating model, and a clear path for future growth, with a central mission of helping patients lead healthier and happier lives.” He elaborated, “We’re thrilled to partner with Dr. Rollins … and the Elite team to enhance the company’s operations, to lead corporate development efforts, and to create value for all stakeholders.”
VSCP, its affiliates, and Rollins contributed the equity for the transaction. THL Credit and Morgan Stanley Credit Partners provided debt financing. Lowenstein Sandler served as legal counsel to VSCP, and BMO acted as financial advisor to EBS.
Mark Hauser Promotes Fitness and Wellbeing for Future Generations
In 2019, the market size of the fitness industry was $87 million, and the health and fitness sectors were growing at a rate of 8.7% per year. This growth was attributed not to an increase in prices but an increase in consumer interest in health and fitness.
Although venture capitalists and investors have started to recognize this trend and are focusing their investments on companies whose mission is to improve the health and fitness industry, they are following in the wake of Mark Hauser, an expert in fitness investing, who saw the potential in this market 30 years ago. Hauser continues to lead the pack in identifying and partnering with strategic partners in the industry.