Fortitude builds out adventure tourism investment with US expansion

Brisbane-based private equity players Fortitude Investment Partners have doubled down on their investment in New Zealand-based adventure tourism company Action Adventures, recently backing the acquisition of US bicycle tour company Discovery Bicycle Tours.

The purchase is the second major addition for the New Zealand adventure group after it purchased another US outfit, Austin Adventures, back in 2021. Both purchases latch onto a US adventure market resurgent on the back of increased tourism, with the post-covid floodgates well and truly open and plenty of capital flowing into travel economies worldwide.

The new acquisition, Discovery Bicycle Tours, runs biking trips across the Americas, Europe and in Asia. The company is known to Action Adventures and is likely to join the stable as a comfortable fit, given the New Zealand group already has a reasonable presence among adventure-goers in the US.

For Fortitude, providing the capital backing required to facilitate the expansion comes as part of a strategic belief that the tourism industry is on an upward trajectory in the wake of the pandemic.

“Tourism has a long-term growth trend globally, and adventure tourism is the fastest growing sub-segment, particularly for older demographics,” Fortitude founder and managing partner Nick Miller tells The Inside Adviser.

The Fortitude team are well-known for taking an active hand in guiding the expansion of their investee companies, which ultimately leads to a subsequent exit at a much higher valuation, typically in the form of a sale agreement with a more scaled private equity group. They typically eschew unitised funds in favour of direct investments of between $10 million and $50 million for majority stakes in companies, and then they use a network of experts to help direct the newly capitalised ventures into their growth phase.

It’s a model Miller refers to as “stacking the deck” for investors, and it has seen Fortitude develop and subsequently sell several mid-sized outfits across the antipodes, including food manufacturer Birch & Waite, Adelaide pub group GM Hotels and digital shopping provider Shopper.

In the case of Action Adventures, he says, the US expansion was aided by Deloitte and independent advisory firm Henslow.

The plan from this point, Miller adds, is to grow the core business at Active Adventures and integrate Discovery into the New Zealand based company’s broader team.

“This marks another significant step in Active’s expansion in the US, following the acquisition of Austin Adventures in 2021,” he adds. “With this acquisition, Active Adventures continues its 25-year legacy of delivering exceptional, fully-guided outdoor experiences to adventurers worldwide.”