Pembroke Hospitality and the Ireland Strategic Investment Fund (ISIF) have announced a €50 million commitment to a new hotel investment fund (HIF). The fund is being established to invest in hotels whose trading has been negatively impacted by the COVID-19 pandemic.
The HIF provides hotel owners with interim funding over the medium term to allow their business to recover and grow post-COVID-19. It will target investments in hotels in the Republic of Ireland that are graded three-star and above, and that have a minimum of 25 bedrooms.
The HIF will provide investment in the form of three-year preference equity (subordinated to senior/bank debt) with a coupon that is rolled-up until redemption at the end of the term. Pembroke Hospitality will manage and execute the fund in partnership with BVP Investments.
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The fund will invest in hotels that have a viable growth plan but are unable to raise finance from banks or alternative lenders. The HIF will provide facilities to hotels between €0.5 million to €5.0 million, for a three-year timeframe. The capital deployed from the fund will support hoteliers to overcome challenges faced as a result of COVID-19 disruption and to return to a positive trajectory.
Statement By Director Of Pembroke Hospitality
Mark Lynch, director of Pembroke Hospitality, stated, "The hotel investment fund is a viable financing solution for hotels that need financial restructuring. The fund will offer borrowers a differentiated capital solution with speed of response and access to decision makers, certainty of execution and continuity of relationship management throughout the term of the funding."
Statement By ISIF Director
Nick Ashmore, ISIF director, stated, "ISIF's Pandemic Stabilisation and Recovery Fund is playing a strong role in supporting viable Irish businesses in sectors that have been hit hard by the pandemic and in helping them to recover and grow. This investment is a further demonstration of our support for Ireland's tourism, hospitality and leisure sectors which play such an important role in attracting visitors to destinations throughout Ireland and supporting jobs and businesses. It is an excellent example of ISIF's unique 'double bottom line' mandate of investing for a commercial return in projects and businesses that support economic activity and employment in Ireland."
The €50 million fund will invest in hotels that need support with working capital and cash flow funding, capital expenditure as well as green and environmentally sustainable investment funding.
Initial applications can be made via HIFIreland.ie.
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