Schroders’ debut hotel fund closes in on fundraising target

Schroders has raised €425 million ($491 million) in equity commitments to date for its debut hotel fund, the Schroder European Operating Hotels Fund I, closing in on its target of €500 million ($577 million). The fund was backed primarily by some of Europe’s largest insurance companies.

Schroder European Operating Hotels Fund I is a closed-end, Luxembourg-domiciled fund that will acquire properties and operate them independently or under a franchise or hotel management agreement. The firm said this enables them to capture the majority of the upside for the fund’s investors.

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.

“While the leisure and hospitality market has been hit hard by the global pandemic, we strongly be