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Saturday, Feb 24, 2024

Alex Bhathal: Building the Raj Empire

Alex Bhathal got involved with his family’s business at age 10, when he was hired to file checks at Raj Swim, the locally based company founded by his parents and which designs, manufactures and markets designer and private label swimwear under nationally recognized brands.

The employment didn’t last long.

“My dad fired me the next year because I was more interested in swiveling in his office chair than doing actual work,” Bhathal told the Business Journal.

A little over a decade and two degrees later, Bhathal was ready to get back in the family business. He was named president of the company in 2006, and with sister Lisa Bhathal Merage, the pair led a private equity backed acquisition of the company, the largest of its kind in the history of the swimwear industry.

Once again, Bhathal didn’t intend on staying with the company for the long term.

“I entered the business with the intention to grow and scale the company and allow my parents to retire from the business, before ultimately exiting the company,” Bhathal said.
Today, Bhathal is the founder and managing partner of Raj­ Capital, the family investment office that counts four portfolio companies, including Raj Swim that the family bought back from the private equity firm. He also serves on the board of several notable investment firms with sizable Orange County operations.

Through the varied business lines that specialize in sports, real estate and consumer products, Bhathal is not just interested in driving returns for his family and his investors, he’s interested in driving positive change in the communities he invests in.

“We’re interested in having a positive social impact, such as our work in investing in historically low-income communities through our Opportunity Zone platform,” Bhathal said.
Bhathal was one of five entrepreneurs honored by the Business Journal at the Excellence in Entrepreneurship Awards, held March 9 at the Irvine Marriott.

Newport Beach Start

Family formed the blueprint for Bhathal’s entrepreneurial career.

“I grew up in a family that’s been in business for some time, starting with my grandparents on my mom’s side, who moved to Newport Beach in the 1940s” and started a real estate development firm, building properties in California, Arizona and Nevada.

His father, Raj, moved from India to Los Angeles in the 1960s, where he met Bhathal’s mom, Marta. The two got married, moved to Newport Beach, and in 1967, started Raj Swim.

“I saw how hard they worked, and the joy that comes from creating a successful business and being able to put food on the table for people in the community,” Bhathal said.

After attending the University of California, Los Angeles for undergraduate school and the business school at the University of Southern California for post-graduate studies, Bhathal joined Raj Swim in 2000.

“We took the company digital and global” before the siblings exited the business in 2015, selling their stake for an undisclosed amount to a private equity firm. The company has since been brought back under the family fold and is led by Bira Bhathal.

Sports, Real Estate Focus

In 2013, the family purchased an ownership stake in the Sacramento Kings NBA team, and joined the city’s efforts to build a new basketball arena and other mixed uses surrounding the stadium.

The company has invested $1 billion in the development of Golden 1 Center, which opened in 2016, and Downtown Commons, a retail and entertainment district. That investment spurred an additional $1.4 billion within a 1.5-mile radius of the arena.

The family is wrapping construction on the final component to Downtown Commons, a reimagined and renovated office building “designed to be a best-in-class modern office for a post-COVID environment.”

That project is headed by RevOZ Capital, which Raj Capital began as an early adopter of Opportunity Zone real estate investing.

On the heels of the Sacramento success, Bhathal is scouting other stadium-anchored real estate opportunities through Raj Capital’s latest business line, Revitate, which invests in consumer products, sports and real estate.

It is considering the acquisition of existing projects as well as the development of new, mixed-use developments.

“Last year we pursued the opportunity to build a new sports arena in San Diego,” Bhathal said. “The city-run process ultimately went with a local developer, but it was a great exercise for us.”

Board Work

Revitate is currently focused on multifamily and industrial developments in secondary cities like Indianapolis, Charleston, S.C. and Albuquerque, N.M. It recently invested an undisclosed amount in a Nevada logistics project spanning 4,400 acres, owned and developed by Mark IV Capital, a local commercial real estate investment platform.

Bhathal is on the board, and also has a seat on the respective boards of Compass Diversified (NYSE: CODI)—the owner of 10 middle market businesses including 5.11 Tactical and Lugano Diamonds in Orange County—and Aspyr Holdings, one of the largest developers and franchisors of Orangetheory Fitness.

He’s also senior operating partner of San Juan Capistrano-based RX3 Growth Partners, a consumer growth fund that grew its assets fourfold last year to $200 million. Its founders include Aaron Rodgers, Byron Roth and Nate Raabe (see separate article on page 1).

Revitate has introduced consumer products to RX3, such as Hydro, which has an almost billion-dollar valuation by making rowing machines with screens showing scenes of world-famous waters, similar to what Peleton Interactive did with exercise bicycles.

Revitate Cherry Tree is a fast-growing business launched in 2021 as a multifamily investment fund with former Irvine Co. alum Chris Marsh. The company counts a portfolio topping 800+ units in the Midwest.

“We are preserving workforce housing to serve an overlooked need in the market, and increase inventory for moderate-income renters like teachers, fireman and entry-level workers,” Bhathal said.

Lisa Bhathal Merage, a 2015 Business Journal Women in Business award winner, heads social impact efforts for Revitate as its chief impact officer and serves as managing partner and co-founder of the family office.

“She spearheads our efforts to deliver positive growth to our communities,” Bhathal said.
Outside of the family business, board and nonprofit work, Bhathal’s hobbies include “staying as active as I can while spending time with my wife and young son” at their home in Newport Beach.

He is a Boston Marathon finisher and completed the Santa Cruz Ironman 70.3.

“Now I’m focused on a much shorter race coming up in June,” Bhathal said. “It’s a 5K—I’m trying to get my speed work down.”

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