Tristan Capital Partners has acquired a majority shareholding in Point A Hotels owner Raag Hotels, in a £420m deal.
The deal marks Wellcome Trust’s exit from the business. Tristan’s opportunistic European Property Investors Special Opportunities 6 fund will own the stake.
Existing shareholders Queensway, which is owned by the Jivraj family, and Fifty Seven 7, a company owned by Rothesay Life chairman Naguib Kheraj, will remain as minority partners. HSBC and NatWest have been retained as lenders.
The Point A portfolio comprises 1,520 rooms in 10 hotels, with 80% of its value in London. EPISO 6 said the budget boutique brand will provide an “immediate footprint across the best markets in UK and Ireland in strategic locations near transport hubs”.
Under the new partnership, Queensway will co-invest and act as hotel operator, asset manager and development partner for future sites. The shareholders have committed significant additional equity to fund the next phase of growth of Point A Hotels with the goal of doubling the size of the estate over the medium term.
Kristian Smyth, executive director, investments at Tristan, said the fund is aiming to make two to three acquisitions per year.
Smyth said: “The acquisition of this hotel platform reflects our wider hotel strategy of partnering with best-in-class operators in market segments that are resilient to market volatility with substantial growth potential.
“All the hotels are strategically situated in city centres within vibrant neighbourhoods, close to demand generators including business districts, tourist attractions and event venues.”
Naushad Jivraj, chief executive of Queensway, said the brand had generated “positive customer feedback resulting in strong occupancy levels”.
“Wellcome Trust have been an excellent partner to work with over the past eight years and we are pleased that this transaction has produced a successful outcome for them,” he added.
Lisha Patel, managing director, investment division at the Wellcome Trust, said: “Our participation in the significant growth and evolution of the Raag Hotels business has produced strong returns over the life of our investment.
“The strength and quality of the Point A brand, the hotel portfolio and the Queensway management team attracted very keen interest from institutions to acquire our shareholding and we are confident the business will continue to perform well and deliver excellent guest experience under new ownership.”
Savills, BCLP, Maples, Brodies, PwC, Artelia and Longevity advised EPISO 6 on the deal. CBRE, Eastdil, Derek Gammage, DLA Piper, BDO and Voisin Law acted for Raag Hotels. GSC Solicitors acted for Queensway.
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