Former Pro-invest Executives Launch Asia Pacific Private Equity Firm
Three former directors of the Pro-invest Group, Phil Kasselis, Luke Sullivan and Ed Faraguna, have teamed up to launch Hospitality Private Equity Partners (H-PEP), a new company targeting acquisition opportunities in the region.
The trio were most recently in lead roles at Pro-invest Group – Kasselis was co-founder and CEO of Pro-invest Hotels, Sullivan the CEO of Pro-invest Hospitality Asset Management and Faraguna the group CFO – and will use their elong period of work in senior management positions in major hotel investment platforms in Asia-Pacific to uncover opportunities in the region.
Kasselis said they bring to the industry substantial expertise in fund management, hotel transaction origination, active asset management, development, operations, debt and structuring and the company will provide its investors access to hotel investment opportunities through a fund structure, separately managed accounts, or direct investment.
He said H-PEP is in talks with investors regarding raising US $ 500 million for hospitality opportunities in Asia-Pacific and that the company was formed to take advantage of the current market cycle in Asia-Pacific. Pacific, targeting hotel investment opportunities “with the potential to add value through renovations, rebranding and revitalization to optimize performance in the most competitive market environment for decades.”
Kasselis said the COVID-19 pandemic has accelerated consumption trends in the tourism sector, with savvy investors expected to benefit from some hotel assets increasing their market share after the pandemic.
“There is no doubt that COVID-19 has had a negative impact on the performance of many hotels and resorts located in Asia-Pacific,” he said.
“The current market cycle presents huge opportunities to acquire underperforming assets, implement value-added asset management strategies and profit from a recovery in post-COVID travel in one of the most dynamic regions of the world.
“We are already seeing a strong investor appetite in the hotel industry with leading investment groups such as GIC, Blackstone, Partners Group and KSL Capital Partners active in Asia Pacific.
“Preqin’s June 2021 Alternative Assets report highlighted that from the end of December 2018 to the end of September 2020, the dry powder for real estate in Asia-Pacific increased by 39%.
“This portends continued inflows of capital into the Asia-Pacific real estate sector and pressure on prices. As travel picks up, we expect capital values in the hotel real estate sub-sector to benefit from increased capital flows to the region.
“Cushman Wakefield identified in April 2021 that there was $ 5.4 trillion in excess savings in the world (6% of 2019 global GDP).
“A growing consumer preference for spending their disposable income on experiences rather than ‘things’ is expected to result in a strong pent-up demand for travel and hotel accommodation, with Asia-Pacific destinations expected to be a big beneficiary.
“The launch of a private equity real estate platform solely dedicated to investing in hotel assets is a natural development for the three of us.
“Our experience with leading fund managers, including Pro-invest Group, Ascendas (now CapitaLand), Colonial First State and Mirvac Group, has given us a proven track record in hospitality operations, investment management and asset management.
“We believe that the time has come to create a dynamic and agile company such as H-PEP to enable investors to take advantage of unique circumstances and create value in the hospitality industry,” he said.
Kasselis said the company, which has already established a presence in Singapore, will focus on hotels in the upscale, upscale and luxury segments, in gateway cities and resorts in the region’s markets.