US Oaktree Close to Acquiring 16 Hotels from Italian Fund

Main Photo: Le Massif in Courmayeur

Date: January 2019

Location: Italy

Name:  Various

No. of Keys: TBA

Seller: Fund manager Castello SGR, a leading real estate asset and fund management company, with €2.3bn assets under management, and headed up by Giampiero Schiavo, CEO. 14.5% of their activity is in hotels.

Buyer: US private equity group Oaktree is said to be close to winning a portfolio of 16 Italian hotels worth €300m from the fund manager Castello Sgr, and may also acquire another separate asset.

According to the Il Sole 24 Ore portal, Oaktree is in exclusivity to take over the 16 hotel assets of Milan-based Castello. The California-based fund, which 18 months ago exited its stake in Polish office company GPRE, has now agreed with credit banks to take over their claims on the Castello hotel package.

Castello manages some €2.3bn in AUM overall but closed 2017 with net income at just €2.9m. It runs 35 real estate funds holding over 350 properties throughout Italy – underwritten by about 100 investors.

Its hotel division includes almost 20 hotels in various Italian locations including Le Massif in Courmayeur and the B & B Hotel in the Trento area.

Castello also set up a separate vehicle, Italian Hospitality Collection, which manages five resorts in Tuscany, Sardinia and elsewhere.

Market sources told Il Sole that Castello is also likely to unload its ownership rights in the region of Portopiccolo on the Gulf of Trieste close to the Slovenian border, and Oaktree is in final negotiations also for this holding currently owned by construction company Rizzani de Eccher.

Oaktree may be interested at further potential development at Portopiccolo, one of the largest environmental requalification projects in Italy of recent years.

The portal said Oaktree is also interested in an equity stake directly in the fund manager itself.

Castello is currently owned 46.2% by Istituto Atesino di Sviluppo, a private equity firm and developer, 32.9% by Maire Investments, a Milan family office, and 14.3% by Italian insurance group Itas, plus others.

The partners have given a mandate to the investment bank Mediobanca to reorganise the shareholder structure of the company.

Oaktree have interests in a wide variety of businesses in Europe and the USA…such as Countrywide PLC estate agents, Fitness First gyms, Pegasus Life in the UK and is partners with Marriott’s Ritz Carlton on their Yacht Collection. The company is co-chaired by Howard Marks and Bruce Karsh.

Price: €300m

Price per Key: TBA

THPT Comment: Oaktree, a serious player across many industries is taking a close interest in hotels in Italy – and further afield?

First Seen: Business

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