Pygmalion Capital, the special situations European hotel investment specialist, plans to launch a follow up this year to Pygmalion European Hotel Opportunities Fund II.
The firm revealed the move as it confirmed a new investment.
It has partnered with Lithuania’s Gemini Grupe to provide mezzanine financing for Kennedy 89 in Frankfurt.
The hotel in question that the pair are financing is an "Unbound" by Hyatt, which family office SIC Properties is developing as a luxury 5-star asset in the heart of Frankfurt, expected to open late 2024. The hotel will be owner-operated.
Pygmalion hit the headlines in 2018 when it established a JV with CBRE Global Investment Partners (CBRE GIP) for the acquisition and repositioning of special situations hotel assets in Europe.
In 2021, it then launched Pygmalion European Hotel Opportunities Fund II, following a similar strategy. At the time it said it was seeking €400 mln of equity although it was not made public how much the fund eventually closed on. At the time, the market was dominated by Covid.
Christophe Beauvilain, managing partner and founder, said at the time COVID-19 had led to what the firm saw as the best investment period ever to invest in the European hotel sector.
New fund incoming
The new pan-European vehicle will launch this year on the back of what the company says is 'strong historical performance' and a ‘deep pipeline’ of investment opportunities.
The firm has offices in London and Barcelona.
Beauvilain founded the company in 2017. He was formerly founding partner of Perenne Capital from 2012 to 2016, which provided deal sourcing and structuring in the European hotel sector. He was also CEO of hedge fund, Alphatran Capital between 2003 and 2007, and worked at Goldman Sachs.
The new Frankfurt asset will have 180 luxury rooms with extended-stay capabilities, including 67 suites, making it one of the hotels with the highest proportion of suites in Frankfurt.
Gemini Grupe is a Baltics and Germany-based investment group. Its main areas of investment include hotel properties, leases, hotel-technology and other hospitality-related businesses.
CMS Germany, led by Jens Moraht advised Pygmalion Capital and Gemini on the transaction.
