North Wind Capital and Banor Capital, through one of its vehicles, have formed a joint venture to co-invest in pan-European hospitality assets, with plans to jointly launch a fund.
The duo said the fund would target small and mid-sized hotels locked in distressed capital structures.
NWC has initially committed £25 million to co-invest alongside Banor Capital, which will match NWC’s investments in the joint transactions.
The parties have previously worked together.
They plan to assemble a hotel portfolio with a gross asset value of around £500 million with a focus on the UK, Southern Europe and Italy.
The partners said the investment strategy will target hotels with multiple demand drivers including those "over-encumbered by debt and capex-starved post-COVID".
Asset business plans will involve "capital structure stabilisation, targeted capex investment, performance improvement through implementing operational efficiencies and rebranding".
The JV will source assets "off-market" through its combined investor network.
Ben Williams, CEO at North Wind Capital, said in a statement: “High interest rates have disproportionately hurt hospitality businesses. Many hotels accrued additional indebtedness to navigate trading conditions during Covid, creating broken capital structures among otherwise highly attractive hotels. Legacy pandemic-era sector disruption led to a backlog of sellers that deferred exits awaiting market stabilisation. At the same time, the specialist operational acumen required to manage hotels limits competition among mid-market assets. Together, these market dynamics create market pricing dislocation, opening the door for specialist hospitality investors like us to capitalise on, as travel demand for business and leisure recovers.”
Lorenzo Guidi, executive director at Banor Capital said: “We believe legacy headwinds has created market dislocation in pockets of the European hospitality sector presenting compelling risk-adjusted investment opportunities for investors with the right mix of operational acumen, asset management and debt restructuring expertise. Our JV will identify fundamentally sound hotels with challenged capital structures, resolve the financial complexity, reposition assets and unlock the growth potential.”
North Wind Capital is a multifamily investment office headquartered in London and advising retained clients with in excess of $1bn of investible assets.
Banor Capital is an independent asset management registered in England, authorised and regulated by the Financial Conduct Authority in the UK, with in excess of $1.5 billion of assets under management. It is the investment manager of various Luxembourg-based investment companies.