Quarterly Report
Q3 2023
Dear Investors,
It was another great quarter for the Alturas Business Fund. Returns were good, but lower than previous quarters, at 15.69%. This is the new low watermark for fund returns. We are excited about the next few quarters when members return to the gym and we open our 9th location. Our returns should increase correspondingly.
The most significant news is the grand opening of our first expansion location at Idaho Fitness Factory, which we expect the first part of December. We are finalizing the tenant improvements and awaiting a shipment of new equipment for the new gym. The new location opens a new area of the metro area (South Boise) where we do not currently have a presence.
While we see this first expansion as an experiment, we have every reason to expect success. We love the projected economics of this expansion location, but we’ll feel more confident once it opens and we know how it performs. Our plan is to aggressively expand as our confidence grows.
Regarding new deals, we put a handful of potential businesses acquisitions through due diligence in the last quarter. Ultimately, none of the companies met our buying criteria. However, we are optimistic about the quality deal flow that is coming our way.
We have positioned ourselves locally as the premier business buyer. We updated our website at www.alturasventures.com to more clearly articulate what we’re up to, and the message is resonating with business owners and service providers. Nearly all of the companies we are looking at are inbound leads, from brokers, business owners, investment bankers, and others from our immediate network.
We’ve learned that executing on deals brings deal flow, so the most important thing we can do is buy businesses and successfully execute the expansion of those businesses. We feel very fortunate to have Idaho Fitness Factory in the portfolio, and we’re eager to add the next business to the fund when the right buying opportunity comes along.
In the meantime, we thank you for your continued support of our team. We’ll let you know when we’re raising more money in the fund.
Thanks,
Blake Hansen
Lucas Henken
Alturas Ventures
Blake Hansen
Alturas Ventures
Dear Investors,
It was another great quarter for the Alturas Business Fund. Returns were good, but lower than previous quarters, at 15.69%. This is the new low watermark for fund returns. We are excited about the next few quarters when members return to the gym and we open our 9th location. Our returns should increase correspondingly.
The most significant news is the grand opening of our first expansion location at Idaho Fitness Factory, which we expect the first part of December. We are finalizing the tenant improvements and awaiting a shipment of new equipment for the new gym. The new location opens a new area of the metro area (South Boise) where we do not currently have a presence.
While we see this first expansion as an experiment, we have every reason to expect success. We love the projected economics of this expansion location, but we’ll feel more confident once it opens and we know how it performs. Our plan is to aggressively expand as our confidence grows.
Regarding new deals, we put a handful of potential businesses acquisitions through due diligence in the last quarter. Ultimately, none of the companies met our buying criteria. However, we are optimistic about the quality deal flow that is coming our way.
We have positioned ourselves locally as the premier business buyer. We updated our website at www.alturasventures.com to more clearly articulate what we’re up to, and the message is resonating with business owners and service providers. Nearly all of the companies we are looking at are inbound leads, from brokers, business owners, investment bankers, and others from our immediate network.
We’ve learned that executing on deals brings deal flow, so the most important thing we can do is buy businesses and successfully execute the expansion of those businesses. We feel very fortunate to have Idaho Fitness Factory in the portfolio, and we’re eager to add the next business to the fund when the right buying opportunity comes along.
In the meantime, we thank you for your continued support of our team. We’ll let you know when we’re raising more money in the fund.
Thanks,
Blake Hansen
Alturas Ventures
Lucas Henken
Alturas Ventures
Blake Hansen
Dear Investors,
It was another great quarter for the Alturas Business Fund. Returns were good, but lower than previous quarters, at 15.69%. This is the new low watermark for fund returns. We are excited about the next few quarters when members return to the gym and we open our 9th location. Our returns should increase correspondingly.
The most significant news is the grand opening of our first expansion location at Idaho Fitness Factory, which we expect the first part of December. We are finalizing the tenant improvements and awaiting a shipment of new equipment for the new gym. The new location opens a new area of the metro area (South Boise) where we do not currently have a presence.
While we see this first expansion as an experiment, we have every reason to expect success. We love the projected economics of this expansion location, but we’ll feel more confident once it opens and we know how it performs. Our plan is to aggressively expand as our confidence grows.
Regarding new deals, we put a handful of potential businesses acquisitions through due diligence in the last quarter. Ultimately, none of the companies met our buying criteria. However, we are optimistic about the quality deal flow that is coming our way.
We have positioned ourselves locally as the premier business buyer. We updated our website at www.alturasventures.com to more clearly articulate what we’re up to, and the message is resonating with business owners and service providers. Nearly all of the companies we are looking at are inbound leads, from brokers, business owners, investment bankers, and others from our immediate network.
We’ve learned that executing on deals brings deal flow, so the most important thing we can do is buy businesses and successfully execute the expansion of those businesses. We feel very fortunate to have Idaho Fitness Factory in the portfolio, and we’re eager to add the next business to the fund when the right buying opportunity comes along.
In the meantime, we thank you for your continued support of our team. We’ll let you know when we’re raising more money in the fund.
Thanks,
Blake Hansen
Lucas Henken
Alturas Ventures
Blake Hansen
Alturas Ventures
Key Numbers
Key Numbers
Key Numbers
15.69%
Average Realized return Q3
15.69%
Average Realized return Q3
15.69%
Average Realized return Q3
22.63%
Average Realized return since inception
22.63%
Average realized return
22.63%
Average Realized return since inception
$189,525
Realized Net income Q3
$189,525
Realized Net income Q3
$189,525
Realized Net income Q3
$1,088.53
Unit Price
$1,088.53
Unit Price
$1,088.53
Unit Price
$1,114,664
Realized Net income since inception
$1,114,664
Realized Net income since inception
$1,114,664
Realized Net income since inception
Stated returns are average annualized investor returns. Individual investor returns may vary based on the unit pricing at the time of investment. Realized net income (Excess Distributable Income) includes realized gains and losses and excludes unrealized gains and losses recorded during the period. Financial information herein related to the quarters ended in 2023 are unaudited as of the date of this report.
Realized Returns
Additional Fund Metrics
Additional Fund Metrics
Additional Fund Metrics
$3.47M
Total Capital Raised
$3.47M
Total Capital Raised
$3.47M
Total Capital Raised
$781K
Investor distributions since inception
$781K
Average realized return
$781K
Investor distributions since inception
24
Number of investors
24
Number of investors
24
Number of investors
91.06%
Current reinvestment rate
91.06%
Current reinvestment rate
91.06%
Current reinvestment rate
$1,000
Unit price
$1,000
Unit price
$1,000
Unit price
$8.52M
Assets under management
$8.52M
Assets under management
$8.52M
Assets under management
*Distributions since inception includes Q3-2023 distributions paid on 10/31/2023.
Idaho Fitness Factory
The Third Quarter of 2023 mirrored that of prior years. We experienced a reduction of members due to seasonality but also took the slowdown as an opportunity to implement some changes. Overall, we lost 657 members. While this is more significant than prior quarters, it also is inline with the third quarter of prior years. Additionally, we implemented a new Credit Card processing fee to encourage members to switch to ACH. The purpose of this was twofold; it reduces our processing fees from our membership and revenue service provider, and we are expecting it to reduce our bad debt. This change will have a positive impact by increasing revenue, decreasing our fees, and reducing bad debt. These two factors in conjunction with the aggressive debt pay down had a material impact on the financial performance of the company for Q3, with our investor returns landing at 15.69%. However, we are about to enter into the busy season, open our ninth location, and the Credit Card fees are a temporary hit that will have a positive impact in the long term. As noted in our prior report and quarterly call, we signed a lease for our ninth Factory location in South East Boise. Tenant improvement construction began in September and is on budget and on track. We expect the new location to open in Late November or Early December which construction completed the week of Thanksgiving and equipment delivered early the following week. While we are excited about the Overland expansion we did have to pullout of our expansion in South Nampa. While the location is terrific, rising interest rates and construction costs ultimately put the lease rate too high for us to comfortably continue with the expansion. However, there are additional inline retail opportunities that are picking up including RiteAids. We continue to prioritize a partnership with Alturas Capital Partners but remain flexible and seek opportunities that make sense for Idaho Fitness Factory. While we experienced our lowest quarter yet in terms of revenue and investor returns, we are also primed for a strong fourth quarter of 2023 and first quarter of 2024.
Idaho Fitness Factory
The Third Quarter of 2023 mirrored that of prior years. We experienced a reduction of members due to seasonality but also took the slowdown as an opportunity to implement some changes. Overall, we lost 657 members. While this is more significant than prior quarters, it also is inline with the third quarter of prior years. Additionally, we implemented a new Credit Card processing fee to encourage members to switch to ACH. The purpose of this was twofold; it reduces our processing fees from our membership and revenue service provider, and we are expecting it to reduce our bad debt. This change will have a positive impact by increasing revenue, decreasing our fees, and reducing bad debt. These two factors in conjunction with the aggressive debt pay down had a material impact on the financial performance of the company for Q3, with our investor returns landing at 15.69%. However, we are about to enter into the busy season, open our ninth location, and the Credit Card fees are a temporary hit that will have a positive impact in the long term. As noted in our prior report and quarterly call, we signed a lease for our ninth Factory location in South East Boise. Tenant improvement construction began in September and is on budget and on track. We expect the new location to open in Late November or Early December which construction completed the week of Thanksgiving and equipment delivered early the following week. While we are excited about the Overland expansion we did have to pullout of our expansion in South Nampa. While the location is terrific, rising interest rates and construction costs ultimately put the lease rate too high for us to comfortably continue with the expansion. However, there are additional inline retail opportunities that are picking up including RiteAids. We continue to prioritize a partnership with Alturas Capital Partners but remain flexible and seek opportunities that make sense for Idaho Fitness Factory. While we experienced our lowest quarter yet in terms of revenue and investor returns, we are also primed for a strong fourth quarter of 2023 and first quarter of 2024.
Idaho Fitness Factory
The Third Quarter of 2023 mirrored that of prior years. We experienced a reduction of members due to seasonality but also took the slowdown as an opportunity to implement some changes. Overall, we lost 657 members. While this is more significant than prior quarters, it also is inline with the third quarter of prior years. Additionally, we implemented a new Credit Card processing fee to encourage members to switch to ACH. The purpose of this was twofold; it reduces our processing fees from our membership and revenue service provider, and we are expecting it to reduce our bad debt. This change will have a positive impact by increasing revenue, decreasing our fees, and reducing bad debt. These two factors in conjunction with the aggressive debt pay down had a material impact on the financial performance of the company for Q3, with our investor returns landing at 15.69%. However, we are about to enter into the busy season, open our ninth location, and the Credit Card fees are a temporary hit that will have a positive impact in the long term. As noted in our prior report and quarterly call, we signed a lease for our ninth Factory location in South East Boise. Tenant improvement construction began in September and is on budget and on track. We expect the new location to open in Late November or Early December which construction completed the week of Thanksgiving and equipment delivered early the following week. While we are excited about the Overland expansion we did have to pullout of our expansion in South Nampa. While the location is terrific, rising interest rates and construction costs ultimately put the lease rate too high for us to comfortably continue with the expansion. However, there are additional inline retail opportunities that are picking up including RiteAids. We continue to prioritize a partnership with Alturas Capital Partners but remain flexible and seek opportunities that make sense for Idaho Fitness Factory. While we experienced our lowest quarter yet in terms of revenue and investor returns, we are also primed for a strong fourth quarter of 2023 and first quarter of 2024.
Financial Summary
The third quarter was one of preparing for the busy season and opening of our new Overland location. We made a couple of key new equipment down payments, delivery is set for next quarter. We are excited to see how the new equipment will improve membership retention. All major expense categories have come in line with expectations. We are confident the emphasis on ACH as the primary payment method, new equipment and new locations opening will provide our investors with the best returns going forward.
Historically, 95% of IFF members used credit cards for their billing. In line with industry standards, we now re
Opportunities in 2023
New equipment at Nampa and Franklin
Overland opening end of November/Beginning December
Financial Summary
The third quarter was one of preparing for the busy season and opening of our new Overland location. We made a couple of key new equipment down payments, delivery is set for next quarter. We are excited to see how the new equipment will improve membership retention. All major expense categories have come in line with expectations. We are confident the emphasis on ACH as the primary payment method, new equipment and new locations opening will provide our investors with the best returns going forward.
Historically, 95% of IFF members used credit cards for their billing. In line with industry standards, we now re
Opportunities in 2023
New equipment at Nampa and Franklin
Overland opening end of November/Beginning December
Financial Summary
The third quarter was one of preparing for the busy season and opening of our new Overland location. We made a couple of key new equipment down payments, delivery is set for next quarter. We are excited to see how the new equipment will improve membership retention. All major expense categories have come in line with expectations. We are confident the emphasis on ACH as the primary payment method, new equipment and new locations opening will provide our investors with the best returns going forward.
Historically, 95% of IFF members used credit cards for their billing. In line with industry standards, we now re
Opportunities in 2023
New equipment at Nampa and Franklin
Overland opening end of November/Beginning December
Idaho Fitness Factory Metrics and Key Performance Indicators
Idaho Fitness Factory Metrics and Key Performance Indicators
Idaho Fitness Factory Metrics and Key Performance Indicators
18,624
Total members
18,624
Total members
(51)
Net member change
(51)
Net member change
72,458
Total square feet
72,458
Total square feet
2,412
Average members per location
2,412
Average members per location
$162K
Average revenue per location
$162K
Average revenue per location
$1.29M
Total revenue Q3 2023
$1.29M
Total revenue Q3 2023
18,624
Total members
(51)
Net member change
72,458
Total square feet
2,412
Average members per location
$162K
Average revenue per location
$1.29M
Total revenue Q3 2023
Member Growth Analysis
As with prior quarters, the total number of “Grandfathered” members has continued to drop, while new “Home Club” and “Unlimited” members continue to increase. At the end of Q3, there were 3,465 Grandfathered members, each paying a base monthly membership of $15 or $25. This is 23% reduction from this membership demographic from the end of 2022. The canceled grandfathered members are being replaced by members on the new pricing plan, with a base monthly membership of $20 or $30. We are confident that this dollar value increase will drive revenue growth year over year. We are excited to see how the new pricing and conversion rates apply during the busy season and the new location with saunas.
Member Growth Analysis
As with prior quarters, the total number of “Grandfathered” members has continued to drop, while new “Home Club” and “Unlimited” members continue to increase. At the end of Q3, there were 3,465 Grandfathered members, each paying a base monthly membership of $15 or $25. This is 23% reduction from this membership demographic from the end of 2022. The canceled grandfathered members are being replaced by members on the new pricing plan, with a base monthly membership of $20 or $30. We are confident that this dollar value increase will drive revenue growth year over year. We are excited to see how the new pricing and conversion rates apply during the busy season and the new location with saunas.
Member Growth Analysis
As with prior quarters, the total number of “Grandfathered” members has continued to drop, while new “Home Club” and “Unlimited” members continue to increase. At the end of Q3, there were 3,465 Grandfathered members, each paying a base monthly membership of $15 or $25. This is 23% reduction from this membership demographic from the end of 2022. The canceled grandfathered members are being replaced by members on the new pricing plan, with a base monthly membership of $20 or $30. We are confident that this dollar value increase will drive revenue growth year over year. We are excited to see how the new pricing and conversion rates apply during the busy season and the new location with saunas.
Fund Description
The Alturas Business Fund is an evergreen business investment fund formed to provide accredited investors access to a diversified portfolio of small to medium-sized businesses. The Fund focuses on acquiring and operating businesses with sustainable and predictable cash flow that produce attractive risk-adjusted returns in the Intermountain West and Pacific Northwest, starting with Idaho. The Fund is a $100 million equity and debt offering.
Fund Description
The Alturas Business Fund is an evergreen business investment fund formed to provide accredited investors access to a diversified portfolio of small to medium-sized businesses. The Fund focuses on acquiring and operating businesses with sustainable and predictable cash flow that produce attractive risk-adjusted returns in the Intermountain West and Pacific Northwest, starting with Idaho. The Fund is a $100 million equity and debt offering.
Fund Description
The Alturas Business Fund is an evergreen business investment fund formed to provide accredited investors access to a diversified portfolio of small to medium-sized businesses. The Fund focuses on acquiring and operating businesses with sustainable and predictable cash flow that produce attractive risk-adjusted returns in the Intermountain West and Pacific Northwest, starting with Idaho. The Fund is a $100 million equity and debt offering.
Our Investment Offerings
Summary of Equity Offering
Our equity offering allows investors to invest in a diversified portfolio of businesses focused on generating excellent ongoing returns from operations. The Fund's offering is best suited for investors who understand and align with the Fund's investment strategy and value long-term partnerships.
Targeted total realized return: 20%
No Preferred Return
Profit Split: 70% investors, 30% manager
Fees: 1.5% asset management fee
Minimum investment: $100,000
Our Investment Offerings
Summary of Equity Offering
Our equity offering allows investors to invest in a diversified portfolio of businesses focused on generating excellent ongoing returns from operations. The Fund's offering is best suited for investors who understand and align with the Fund's investment strategy and value long-term partnerships.
Targeted total realized return: 20%
No Preferred Return
Profit Split: 70% investors, 30% manager
Fees: 1.5% asset management fee
Minimum investment: $100,000
Our Investment Offerings
Summary of Equity Offering
Our equity offering allows investors to invest in a diversified portfolio of businesses focused on generating excellent ongoing returns from operations. The Fund's offering is best suited for investors who understand and align with the Fund's investment strategy and value long-term partnerships.
Targeted total realized return: 20%
No Preferred Return
Profit Split: 70% investors, 30% manager
Fees: 1.5% asset management fee
Minimum investment: $100,000
All projections are hypothetical and predicated upon various assumptions that may or may not be identified as such. The future operating and financial performance information contained herein is for illustrative purposes and is not intended to portray any sort of targeted or anticipated returns. There can be no assurance that the Fund will achieve its investment objectives and actual performance may vary significantly.Alturas Ventures, LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.