Schroder Real Estate’s hotels arm has raised an initial 60% of a €500m fundraising target for its debut European fund.
According to the manager, Schroder European Operating Hotel Fund I has received €300m of equity commitments from European institutional investors and family offices, and several more investors in the process of committing to the fund which is expected to reach €800m of capital (including leverage of 40%) in a few months.
Schroders said the fund will target a portfolio of between 10 to 15 European hotels through the acquisition, selected refurbishment and operational improvement of existing hotels.
Frederic de Brem, head of Schroder Real Estate Hotels, said: ”The support we have received from our long-standing institutional investment partners is a strong endorsement of our business and strategy.
“With 60% of the €500m target fund size already raised, and several more investors in the process, we anticipate closing the Fund in a few months with €800m of capital (including leverage of 40%) and a strong pipeline including one property already in exclusivity.”
Georg Wunderlin, Global Head of Private Assets, Schroders, said: “At a time when yields are at an all-time low across many property sectors we believe that this segment of the hotel market has the capacity to generate attractive, risk-adjusted returns for investors looking for alternative, non-mainstream investment opportunities.”