Schroders’ European hotel fund surpasses €500m target

Aerial view of Tower Bridge and Canary Wharf skyline at sunset
Aerial view of Tower Bridge and Canary Wharf skyline at sunset. (DieterMeyrl/Getty Images)

Schroders Capital’s debut discretionary pan-European operating hotels fund has reached €525 million of investor commitments, €25 million over its hard-cap target.

The total also exceeds the initial target of €300 million.

Investors encompassed 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.

Assuming moderate leverage, the Fund has around €850 million of capital to invest and is well-positioned to take advantage of the opportunities emerging across Europe.

The Schroders Capital real estate hotels team consists of almost 40 dedicated hotel investment and asset management specialists located throughout Europe. 

“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+ hotels currently managed by the team and we believe this will enable us to be even more effective in our new deal underwriting,” Frederic de Brem, Head of Real Estate Hotels, Schroders Capital, said.

“We’re not a private equity player looking to generate out-sized returns by making large, risky recovery plays on distressed assets in average locations; 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.

"The fund’s acquisition of the 5* Grand Hotel Central in Barcelona last month exemplifies this strategy. We have an active pipeline and hope to announce further investments in the coming months.”