European investors back Schroders’ debut hotel fund

Schroders has completed a first closing of its European Operating Hotel Fund I with €300 million ($332 million) in equity commitments. The debut hotel fund was backed by European institutional investors and family offices.

The fund’s strategy is to create a diversified portfolio of between 10 to 15 European hotels through the acquisition, selected refurbishment and operational improvement of existing undermanaged or underinvested three- to five-star hotels across Western Europe, according to Schroders.

According to Schroders, the European Operating Hotel Fund I will own both the real estate and the underlying operating business of each hotel, and Schroder Real Estate Hotels will either manage each property independently or work with an operator under a franchise or hotel management agreement.

The fund is targeting €500 million ($554 million) in equity commitments and has several other investors lined up, according to the firm.

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