Emerging manager HighPost Capital, well-known in the market for its starry founders and backers, raised $535 million for a debut consumer-focused offering.
The New York private equity firm closed HighPost Capital Fund I this month, bringing in $420 million, chairman and CEO David Moross told Buyouts. It picked up an additional $115 million through side-car co-investment pools.
Fund I raised commitments from 24 institutions, endowments, family offices and high-net-worth investors, he said, including the family of Amazon founder Jeff Bezos.
Another backer was the GP stakes arm of Italy’s Azimut Group, which in 2021 acquired a minority interest in HighPost. In addition, Azimut “provided a great access point for European investors,” Moross said.
HighPost was established in 2019 as a joint venture of Moross, a veteran of PE investing in the consumer sector, and Mark Bezos, brother of Jeff and a former consumer brand developer.
Moross began his PE career in 1998, partnering with Mark McCormack of sports and media business IMG to form Sports Capital Partners. When McCormack died in 2003, Moross launched Falconhead Capital to continuing investing in the broader consumer space.
Bezos spent much of his career as an ad executive, creating his own agency, Bezos-Nathanson, in 1999. He later turned to philanthropy, joining poverty-fighting non-profit Robin Hood, and angel investing. He is also a director of the Bezos Family Foundation.
Bezos and Moross created HighPost to leverage their sector experience. The firm invests in mid-market businesses operating in consumer goods and services where it can help drive growth and operational improvements. While the strategy is global in scope, most dealflow is expected to be sourced in North America.
Primarily a control investor, HighPost will also acquire minority growth equity stakes in companies with $15 million-plus of EBITDA and $75 million-plus of revenue. Doing deals on its own or with others, it targets opportunities in subsectors like sports, media, health, wellness, leisure and lifestyle.
A key aspect of the strategy is tapping into secular demographic and marketplace trends that are disrupting and reshaping the consumer sector. An example, Moross said, is digitalization, comparable to that led by Amazon nearly 30 years ago when it started a retail revolution and changed the way the world shopped.
“There are dynamic and compelling long-term consumer shifts which we view as permanent,” he said. “Today, it is not possible to be in the consumer space without having a technological component.”
Digitalization is a theme in the firm’s initial investments, the earliest of which was Spotter, a YouTube creator platform. In February, Spotter announced a $200 million financing from SoftBank Vision Fund that came on the heels of $555 million raised from other investors, among them HighPost.
In March, HighPost also announced its acquisition of Centr, a personalized digital health and fitness company founded by Hollywood actor Chris Hemsworth, and Inspire Fitness, a maker of state-of-the-art fitness equipment. The two were merged under the Centr brand.
And in June, HighPost announced leading an $85 million financing of Magic Spoon, a producer of high-protein, low-carb cereals. Participating investors included Siddhi Capital, Coefficient Capital, Constellation Capital and Carter Comstock along with a host of celebrities.
Fund I will do seven to eight platform deals, a job that is being made easier, Moross said, at a time of uncertainty and volatility.
“The opportunity set in the consumer space is terrific if you have lots of dry powder,” he said. “It is better to look at opportunities when things are down than when things are up.”
Bezos and Moross oversee a team of 14 professionals. They include senior managing director Kevin Mailender, an ex-Oak Hill Capital partner, and senior managing director Dave Gubbay, a former Falconhead partner.