Healthcare is one of the largest and fastest-growing industries in the world. It encompasses a broad range of investment opportunities, from digitizing healthcare to promoting community wellness. According to research, global healthcare spending could reach more than $10 trillion by 2022. Among those seeking investment opportunities within this booming industry is Mark Hauser of Hauser Private Equity (HPE).
Mark Hauser is a co-managing partner at Hauser Private Equity, a hybrid equity fund manager with a “strategy of directly co-investing throughout the lower-middle and middle market via partnerships with control buyout funds and selectively with managers of subordinated debt, growth equity, and special situation funds.”
Investing in Healthcare
Strategic investments are part of Hauser’s DNA and form the foundation of Hauser Private equity. Every decision is based on comprehensive due diligence, and, as a result, the firm’s portfolio has experienced positive returns over the years. Here is a brief summary of HPE’s major investments targeting the healthcare industry.
Stat Health Management (2016)
The global market for urgent care centers is predicted to reach $40.7 billion by 2027, growing at a compound annual growth rate (CAGR) of 4.2% over the forecast period. This market is driven by a convergence of factors, including demographics, national policy, rising wait times for primary care service providers, and the search for cost-effective delivery methods for medical services.
Anticipating the need for urgent care services as early as 2016, HPE completed an investment in Stat Health Management, LLC. Stat Health is an urgent care provider that offers management services to a chain of urgent care centers. Staffed by board-certified emergency medicine physicians, it provides unscheduled treatment options for minor injuries and common illnesses at a fraction of the time and cost of emergency care.
HPE’s investment has supported the recapitalization of Stat Health over the past five years. At the time of the transaction, Hauser stated: “With healthcare costs rising and an aging patient demographic, we believe that Stat Health is positioned perfectly for growth within a prime regional market. Stat Health’s stellar reputation supports HPE’s mission to invest in stable, quality companies.”
Cincinnati Eye Institute (2018)
Urgent care is not the only sector experiencing profound growth today. The global vision care market size is expected to reach $193 billion by 2026, with a CAGR of 5.6% during the forecast period. The vision care market is highly segmented and includes products such as eyeglasses, sunglasses, intraocular lenses, and ocular health products.
Again, HPE foresaw potential in the market and completed an investment in the Cincinnati Eye Institute (CEI), an ophthalmology practice, in 2018. At the time, CEI had 14 clinical centers, three ambulatory surgical centers, more than 60 practicing ophthalmologists and optometrists, with more than 200,000 patient engagements. The company was also completing more than 25,000 surgical procedures annually.
HPE co-invested at the time with Revelstoke Capital Partners, a Denver-area private equity firm. Together, Revelstoke and CEI created CEI Vision Partners (CEIVP), a management services company.
According to CEI Chairman of the Board Robert Foster, M.D., the “Our goal, with the launch of CEI Vision Partners, [was] to become one of the nation’s largest and most comprehensive eye care management companies, delivering the highest level of compassionate patient care and leading the way in vision clinical care, surgery, and research all supported by an innovative and best-in-class management team.”
At the time the partnership was established, Simon Bachleda, managing partner at Revelstoke, said: “After a multi-year outbound search in the vision care sector, we are very excited to partner with such an impressive group of physicians and management to launch CEI Vision Partners.”
Clyde Bell, CEO of CEIVP, shared the following: “The strategic and healthcare expertise that Revelstoke brings will enable us to accelerate our growth while maintaining the highest levels of compassionate patient care.”
Virginia Eye Consultants (2019)
In February 2019, CEIVP purchased Virginia Eye Consultants (VEC), a 17-provider ophthalmology group that, at the time, consisted of four established clinics and one ambulatory center. The purchase marked a positive step forward for investors.
When the purchase was made, CEO Bell said, “With Virginia Eye Consultants joining [CEIVP], we now offer a dual platform business model to grow ophthalmology practices in the Midwest and the Mid-Atlantic regions.” He continued, “VEC is well established with a strong reputation for providing surgical services in multiple specialties with the highest level of patient care. By partnering with VEC, [CEIVP] is able to reach additional markets and expand patient access to top ophthalmologists.”
Andrew Welch, managing director at Revelstoke, elaborated: “[CEIVP’s] expansion has been impressive, but our goal is not to be the biggest in the industry – our strategy is to be the best ophthalmology management services organization by partnering with premier practices in targeted regions. The interest we have received from leading Midwest groups in joining our platform has been phenomenal, and we are excited to replicate and extend this strategy in the Mid-Atlantic region.”
Omni Eye Services (2021)
HPE’s streak of promising investments continues today. In April 2021, Omni Ophthalmic Management Consultants (Omni), announced its strategic partnership with Erie Retinal Surgery (Erie). Omni is an optometric referral practice that provides a full range of specialty services for the advanced treatment of eye diseases and a portfolio company of NMS Capital (NMS); Erie is a market-leading regional provider of medical-surgical retinal services in Western Pennsylvania. HPE has a direct investment in Omni.
Dr. Christopher Quinn, CEO of Omni, explained: “Erie helps our platform expand further west in Pennsylvania, adding … density in an existing state with two [more] locations, including one injection suite, while also further diversifying our service mix through increased retina services.”
NMS partner Luis Gonzalez added, “The Erie partnership, Omni’s seventh, allows the Company to continue its expansion west in Pennsylvania and further solidifies our presence as one of the largest ophthalmology groups in the Northeast and Mid-Atlantic with [more than] 70 providers across nearly 30 practice locations, including several ambulatory surgery centers.”
Additional Direct Investments
In addition, HPE reports that it has directly invested in Doctor’s Best and Injured Workers Pharmacy. Based in Southern California, Doctor’s Best manufactures dietary supplements developed through scientific research and clinical studies, while Massachusetts-based Injured Workers Pharmacy is a national home delivery service that works on behalf of injured individuals.
HPE Partners for Growth
Mark Hauser and Hauser Private Equity recognize that opportunity goes hand in hand with identifying investment partners for prospective funds. Since its inception, HPE has partnered with numerous firms, with all partnerships deemed beneficial to its portfolio’s growth. Additional HPE fund partners include Blackstreet Capital Partners, Clarion Capital Partners, Consonance Capital, EDG Partners, Eureka Equity Partners, Frontenac, Great Point Partners, Gryphon Investors, JLL Partners, LightBay Capital, New MainStream Capital, One Equity Partners, Palladium Equity Partners, Prairie Capital, Prospect Hill Growth Partners, Shore Capital Partners, Spanos Barber Jesse, Staple Street Capital, Varsity Healthcare Partners, Waud Capital Partners, and Wellspring Capital Management.
The Future of Healthcare
According to a report by Deloitte, “Consumers are driving – and accelerating – the pace of change in healthcare. Their needs and goals are driving innovation in health-related products, services, and tools. Their preferences are driving the development of digitally enabled, on-demand, and seamlessly connected clinician-patient interactions. Their demands are driving the transition to patient-centric care delivery across geographies and socio-economic groups. And their expectations are driving industry stakeholders to elevate a transactional patient/customer healthcare encounter into a holistic human health experience.”
Mark Hauser and Hauser Private Equity long-ago recognized the potential in the healthcare sector and began investing in associated companies. They have continued to identify growth opportunities within the healthcare industry and continue leading the way in forming strategic alliances with key partners.
