Internos drums up further €210m for hotel fund

Fresh from its recent takeover of Commerz Real’s Spezialfonds business in Germany, which we reported on in a recent issue of REFIRE, fund management business Internos Global Investors said it made its second closing with €210m of equity for its Hotel Real Estate Fund, nearly three times the equity raised in the first closing in mid-2012.

Structured as a German Spezialfonds operated by Internos’s own KAG, the second closing of the fund brought in a further €135m from three new German pension fund investors along with additional commitments from the fund’s four founding investors, doubling their original €75m equity.

Since launching in July 2012, the fund has either bought or committed to buy seven hotels across Germany, Austria and the Netherlands for about €200m. With other deals in the pipeline, Internos said it expects the fund’s investments to reach €250-300m over the next six months, and to have €400m of assets under management by end-2014 as it deploys the fresh equity. It said it had paid distributions of the equivalent of an 8% dividend over the first year to its investors.

The Hotel Fund’s manager Jochen Schäfer-Suren explained why he thought the fund was doing well: “We’re focussing on low-risk, existing three-to-four-star hotel assets with a good track record and long leases in major cities in the stable, core Eurozone countries, as well as the low interest rate financing environment. Also, the fund’s ‘club’ nature of a small number of German investors with a coherent regulatory, legal, accounting and reporting framework has strengthened its appeal from the outset.”