Hospitality Sub-fund
The Hospitality Sub-fund is an opportunistic fund targeting hospitality assets in Europe, and particularly Central and Eastern Europe. The Sub-fund focuses on assets with potential of redevelopment or repositioning and therefore targets an over–average return of at least 20% IRR for its investors. The objective of the fund is to balance lower risk/return investment in capital cities in Central Europe and higher risk/return investment into secondary cities in Central Europe Balkans capital cities, Russia and Croatia coast.
To achieve over–average return, the Sub-fund will particularly focus on:
– Assets with development or redevelopment potential, relying on Orco Group’s extensive project management resources.
– Assets with positioning, management and brand upside, relying on an experienced hotel asset management team.
– ‘Below the radar’ acquisitions. The Sub-fuund, through Orco’s strong local presence, has access to properties that are not officially marketed for sale.
The Sub-fund strategy is to focus on large assets that will be managed and branded with main international operators (Marriott, Starwood, Hilton etc.). For smaller, turn around acquisitions, the Fund will rely on MaMaison Hotels & Apartments, subsidiary of ORCO, which already manages some of the assets owned by the Fund.
The Hospitality Sub-fund is being seeded with a 50% stake in a portfolio of 10 hospitality assets developed by ORCO in Central Europe and Russia worth 166 million € and has lined up a pipe line of 400 million € investments for closing in 2nd half 2007 including investments in Prague, Moscow, Paris, Croatian coast and Germany (available upon signing confidentiality agreement).
There is dedicated hotel team:
– B. CAILLARD, Asset Management – Hotel management relationships
– M. BEZRUKOV, Asset Management – Finance
– M. LINDT, Acquisitions and Analysis
– K. RUPAR, Hotel Development
– Besides the Hospitality Sub-fund can rely on existing Endurance Fund Management, headed by C. MANTHE, and acquisitions, headed by J. ALSON, and the whole ORCO Property Group acquisition team in the different countries.
The objective of the Sub-fund is to balance lower risk/return investment in capital cities in Central Europe and higher risk/return investment into secondary cities in Central Europe, Balkans capital cities, Russia and Croatia coast.
| Launch date | June 2007 |
| Legal status | Luxembourg FCP |
| Targeted equity | 250 million EUR |
| Miminum investment | 5 million EUR |
| Annual management fee | 2% |
| Expected maximum leverage | 65% |