Schroders Capital has held a final close for its debut pan-European hotel fund, exceeding its €500m fundraising target.

The Schroders Capital European Operating Hotels Fund raised €525m, nearly double its initial target of €300m following what it said was “significant investor interest in the strategy” and capabilities of its 40-strong team.

In 2018, Schroders acquired European hotels specialist Algonquin.

Investors included some of Europe’s largest insurance companies, primarily from France, the Netherlands and Finland, as well as a sovereign wealth fund from the Middle East.

With leverage, the fund has about €850m to invest in the sector.

Frederic de Brem, head of real estate hotels at Schroders Capital and former Algonquin CEO, said: “COVID-19 has been a massive learning experience, even for our highly experienced team.

“Our cost management skills have been carefully honed over the last year on the 50-plus hotels currently managed by the team and we believe this will enable us to be even more effective in our new deal underwriting. 

“We’re focused on securing off-market deals offering deal security to sellers of high quality assets in great locations that can benefit from further asset management optimisation.”