Why you should care
Because sometimes the answer is right in front of you.
A Sunday morning for a bougie Manhattanite or Los Angeleno might include a stop at fancy spin-class SoulCycle before a gluten-free, egg-white brunch accompanied by a gloppy kale smoothie; on a weeknight, that same character could be found checking into glitzy gym Equinox or at Whole Foods, racking up a $90-plus bill.
Obvious enough, right? A total trope, in fact. Which is why it’s so surprising how few people noticed just how much big money was waiting in the eager hands of these spinning, brunching health nuts. And which is also why, when one woman did catch on, she made her career. Fresh-faced banker Aarti Kapoor, now 30, made her pitch two years ago to a room full of gray-haired bosses at the boutique investment bank Moelis & Co. It went something like this: Health and wellness is a trillion-dollar industry, fitness freaks will fork out at least $100 a month for a customized experience (according to the International Health, Racquet & Sportsclub Association) and fitness industry revenue is expected to grow to $35.5 billion by 2020, compared with a forecast of $29.8 billion as of 2015, according to an IBISWorld report.
And as buyout firms have flocked to the space in the past year or two, Kapoor has been described as one of the earliest movers into this market, according to bankers in the industry (some of whom did not want to go on record about a colleague or competitor). For her part, Kapoor speaks simply … and like one of the customers of the market she serves: “It’s a lifestyle,” she says, with a tag-liney glint. “I won’t spend on that pair of shoes or handbag, but I will on a Flywheel class.” A “new status symbol,” she quips; she would know — when OZY caught up with her at Moelis’ upscale Park Avenue office in Manhattan, she wore a crisp white dress and skyscraper heels, and at the risk of being slightly impish, we must point out her figure — well-sculpted from her 6- to 8-mile daily runs or, of course, one of those quick boutique fitness classes.
Once on the inside, she made her name like a Mad Men character.
Today, Kapoor, whom Moelis poached from Citigroup with just two years of experience under her belt, has risen up to the highest echelons of power in this competitive world. She founded and now runs Moelis’ multimillion-dollar health and wellness coverage, including the boutique fitness space, advising on major deals on behalf of America’s biggest fitness studios. She’s behind much of what makes up the everyday lives of the country’s health freaks: a $109 million investment in Flywheel (a SoulCycle competitor), according to an SEC filing; a private equity stake in Barry’s Bootcamp, the sale of health food company Vega to WhiteWave Foods for $550 million. We can expect Kapoor to rise fast at a thriving bank: Last year, Moelis — founded in 2007, two years before the crash — went public, putting it on the same footing as respected banks like Lazard and Evercore. It’s advised on deals totaling over $560 billion globally. Its roster is full of recognizable names: Anheuser-Busch, Hilton Hotels, Hugh Hefner’s Playboy. In other words: Succeeding here means succeeding big.
Like the Jamie Dimons, Hank Paulsons and other prodigies of Wall Street, Kapoor has positioned herself head and shoulders above peers early on in her career. “She has transformed herself from being a worker in the system” to “an industry expert and a producer at such a young point in her career,” says one longtime banker, who could not be named for the reason mentioned earlier. She has, the banker says, aced the surprisingly difficult art of cold-calling and deal-closing; it’s that, and her rigorous financial acumen skills picked up at Citigroup. “I haven’t seen another young banker that got so far out so early on.” Health and wellness: just the beginning.
It might not have turned out this way, though. “It was a disastrous time” for banking, Kapoor says of the first few years of her Moelis time, as the financial crisis had just hit, leaving Citigroup (which declined to comment) reeling, and leading to “distracted senior bankers” who couldn’t put in the time, she says. “As a young, hungry junior banker,” she needed another option. Once on the inside, she made her name like a Mad Men character: by convincing Roger Hoit, a 25-year veteran banker and Moelis managing director, to hit up a couple of Flywheel classes. The rest: history. In any case, it’s enough to make her Indian-immigrant parents, who moved to the U.S. five years before she was born, shimmer with pride. She grew up in Princeton, New Jersey, a onetime varsity tennis team captain, swimmer and ballet dancer. She always had a thing for numbers, she says, figuring out she was good at math “very early on” by way of her love for (and success at) BC calculus.
But is being a trend spotter alone enough? Possibly not, when the trends themselves aren’t always as logical as they could be. Brian Smith, who also advises on deals in the fitness sector for investment bank Piper Jaffray and has worked on major transactions himself, including advising on a private equity investment in Pure Barre, says there might just be too many players for even the smartest banker to definitively win. In every borough and neighborhood, new boutique studios are cropping up, the “longevity” of which Smith questions. Just think of the long-forgotten, embarrassing ’80s, when spandex, Jane Fonda and aerobics were hot, or the Gold’s Gym-era ’90s, when a tee from the gym made you cool. “The jury’s out on who wins,” he says.