Specialist private client investment business Connection Capital has added a historic freehold hotel to its investment portfolio, meeting demand from private investors who are increasingly seeing the value of an opportunistic strategy to secure high quality assets in the current climate.
- Investment made alongside experienced hotel operator, Vine Hotels, chaired by Greg Dyke
- Re-opening of Bredbury Hall Hotel & Country Club will create 100 jobs
Connection Capital’s clients have acquired Bredbury Hall Hotel & Country Club at a significant discount to its pre Covid-19 valuation, after it went into administration in 2020. Prior to the pandemic, the business was performing strongly, consistently generating revenues in excess of £4m per annum and had recently undergone extensive refurbishment.
In total, Connection Capital’s private investor clients provided £4.4m of senior debt to fund the acquisition, conclude renovations and provide working capital, and have a majority equity stake in the new corporate vehicle. The deal represents a 51% LTV (loan-to-value) based on market value and taking historical earnings into account.
Located in Stockport and set in seven acres of landscaped gardens and scenic walking trails in the Goyt Valley, Bredbury Hall Hotel & Country Club has 149 rooms, ten conferencing and banqueting suites, a 200-cover restaurant, 60-cover lounge bar and brasserie, fitness centre and a 16th century barn. It will re-open in June 2021, creating 100 jobs.
The investment was made alongside Vine Hotels, a hotel operating company chaired by Greg Dyke, the former BBC Director-General and FA Chairman, which will operate the hotel post-deal.
This is the second time that Connection Capital and Vine Hotels have co-invested, using a similar strategy. In 2013, they purchased a 140-bedroom, 3-Star Best Western hotel in Manchester from a receiver portfolio and exited the investment four years later having doubled their money.
Recent research[1] conducted by Connection Capital reveals that 68% of its private investors who responded see deals that are opportunistic in nature, such as where the current conditions have had an impact on pricing, as an attractive characteristic for any new alternative investment prospect. More than half (54%) said that special situations and distressed debt opportunities are likely to be the most interesting alternative investment strategies over the next 12 months.
Doug Wilson, Investment Director at Connection Capital, comments, “This is a great chance to snap up a high-quality asset with a good record of profitability at a significant discount and enable it to trade successfully again once market conditions improve, creating many jobs in the local area.”
“It’s exactly the kind of opportunistic deal our private investor clients have been telling us they want to access in the current climate.”
“Now that Covid-19 restrictions are easing, allowing UK tourism and hospitality to open up after a long period of lockdown, the timing is apt. The Bredbury Hall Hotel is in an excellent position to capitalise, having been newly refurbished and with a highly experienced operator taking the helm.”
“The lack of senior bank lending available in the market has allowed us to step in and enable our clients to benefit from equity-style returns potential from a senior debt risk profile. The funding structure provides robust levels of headroom to support a longer closure if the government’s timetable for re-opening the economy changes, and our clients’ senior charge over the freehold also provides a good level of downside protection.”
“We’ve established a fantastic relationship with Vine Hotels having invested with the team before and we know they have the expertise necessary to turn this landmark hotel around and restore it to its former glory.”
About Connection Capital
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £320 million of funds under management across a diverse portfolio.
Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.
Press enquiries:
Claire Madden
Managing Partner
Connection Capital
020 3696 4010 or 07764 241476
Russell O’Connor
Headlines for Business
07760 282586
[1] Survey carried out among Connection Capital clients between 14 April and 30 April 2021. 203 out of around 1,200 clients took part. Connection Capital clients’ total estimated net worth is over £11 billion.