Cannabis-focused alternative investment firm Salveo Capital has hired former Goldman Sachs managing director Thomas Mazarakis to serve as managing partner.
Working alongside existing managing partners Michael Gruber and Jeffrey Howard, Chicago-based Mazarakis will focus on portfolio management and strategic direction for the Northbrook, Illinois-headquartered firm.
Founded in 2016, Salveo is currently targeting a mid-year first close for its debut private equity fund, which has a target of $25 million and a focus on ancillary businesses that do not “touch the plant.” According to a regulatory filing, the fund had raised $1.7 million from 20 investors making commitments of at least $10,000 as of mid-January 2017.
Salveo representatives declined to comment on the current status of fundraising.
Mazarakis joined Salveo after 16 years with Goldman Sachs, where he served as a managing director and head of the fundamental strategies group after an earlier stint leading the retail/consumer sector team, according to his LinkedIn profile. He previously held a high-yield credit research position with Citi in New York.
The profile says he currently serves as a member of Chicago-area angel investor group Cornerstone Angels and as a principal at Enceladus Investments, an advisor and private equity investor in early-stage companies.
Speaking to Agri Investor on the same day as former US House Speaker John Boehner’s announcement that he had joined the board of cannabis cultivator Acreage Holdings, Mazarakis said Boehner’s decision was only the latest in a series of watershed events that have helped legitimize the industry.
Constellation Brands’ October purchase of a stake in a diversified cannabis producer; publicly-listed tobacco supplier Alliance One International’s February investment in cannabis and hemp; and a strategic alliance announced last month between medicinal cannabis producer Tilray and an affiliate of global healthcare company Novartis have all served as significant milestones for the industry, according to Mazarakis.
In the context of recent Gallup public opinion polling that showed 64 percent of US adults in favor of full marijuana legalization, Mazarakis said, these investments demonstrate that cannabis is becoming more mainstream.
“We don’t have federal legalization yet, but you can see where this is going,” he added. “It is just a matter of time and you need to skate to where the puck is going to be and it’s very clear where it’s going.”
That clarity has helped also lead to a “crescendo of interest and traction” with investors, who Mazarakis said are reluctant to miss out on a market that, in North America, Salveo expects to grow from sales of $9 billion today to an estimated $22 billion by 2020.
“Because there really isn’t any institutional money – or very, very little institutional money – in this space, these companies are capital-starved,” said Mazarakis. “It provides, essentially, better returns for those high net worth individuals and family offices that can step up here.”