Partners provides mezzanine finance for hotel buy

Partners Group, the Swiss private markets investment manager, is said to have provided mezzanine financing for Blackstone's acquisition of the Mint hotel chain.

In a statement on Thursday, Partners Group said it has funded the purchase of a portfolio of high-quality hotels in the UK and the Netherlands, but declined to reveal further details. 'This mezzanine financing is another excellent example of how we manage to combine our top-down/relative value views with actual direct investments into quality properties that are owned by highly skilled asset managers and located in markets with solid fundamentals,' said Claude Angéloz, partner and Co-Head Private Real Estate at Partners Group.

It is understood that the mezzanine debt served to finance US private equity group Blackstone's EUR 687m buy of Mint Hotels, a family-run UK hotel chain with four-star assets in the British cities of Birmingham, Bristol, Glasgow, Leeds, Manchester, London, and Amsterdam.

Earlier this month, Blackstone's managing director Marty Kandrac pointed to the deal as one example of the large-scale emergence of alternative lenders, which are increasinly replacing traditional bank financing. 'Mint Hotels was a fairly large transaction and a fairly large financing and it is noteworthy that none of the investors participating in the syndication process was in fact a bank,' he said.

The financial institution which originated the loan effectively sold it down to a number of sovereign wealth funds, insurance companies and other financial institutions, Kandrac noted. 'We are seeing a large-scale replacement of banks' role in the property industry.'