Investing in hospitality through club deals
The Opportunity of Hotel Investment with EXTENDAM’s Expertise
Through Professional Private Equity Funds (FPCI) structured as Club Deals, we provide you with the opportunity to invest in the hospitality sector via targeted SMEs.
Our recognized expertise in Club Deals—with over €310 million in assets raised [*], 22 Club Deals already marketed, and a portfolio of 45 hotels totaling more than 5,300 rooms in operation—demonstrates our ability to identify and seize what we consider to be the most compelling market opportunities [**].
At EXTENDAM, we aim to provide access to high-quality hotel assets, including unique establishments or multi-hotel portfolios. What sets our support apart is our rigorous underwriting methodology and our expertise in identifying and securing the most relevant investment opportunities, always tailored to the needs of our investors.
Our dedicated team implements bespoke Asset Management [1], identifying upstream the levers for optimizing revenue, Occupancy Rates [2], and RevPAR [3]. This approach aims to ensure proactive oversight of your investments and maximize yield potential [**] while respecting your objectives and risk profile.
Through proprietary sourcing and targeting prime locations for hospitality, we seek to foster Value-add across territories and support the evolution of the European hotel sector alongside you.
Key Features of Our Club Deal
Please refer to the Fund Regulations to learn about the strategy, objectives, and all other necessary information. The various investment stages are as follows:
- Detection: Identification of opportunities before they hit the market (primarily proprietary sourcing).
- Analysis: Evaluation of appropriate locations for economy/midscale hospitality (city centers, train stations, high-activity zones).
- Visibility on Value Creation: Acquisition, renovation, repositioning, and resale.
- Bespoke Asset Management: Revenue, Occupancy Rate [2], and RevPAR [3] optimization axes identified upstream by the management team.
- Perspectives: Viable and appropriate profitability, risk, and investment duration perspectives in line with the FPCI’s management policy [**].
Summary of Extendam’s investment strategy
Methods may vary.
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Sourcing
Privileged direct access, without intermediaries
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Analysis
In-depth potential assessment and detailed financial modeling
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Securitization
Targeted hotel assets protection
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Value-Add
Hotel assets enhancement
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Oversight
Active operational steering and dynamic asset management
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Divestment
Optimized exit and fund liquidation
Everything you need to know about our Hospitality Club Deals
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What is a Club Deal?
A Club Deal is a collective investment structure that allows a restricted group of investors to participate in significant operations, typically in real estate or private equity. This type of transaction provides access to investment opportunities that would be difficult to capture individually.
In hospitality and private equity, the Club Deal is often a preferred investment method. Unlike a discretionary fund, where the management company deploys capital across multiple operations, a Club Deal generally brings together a group of investors around a single, clearly defined opportunity identified in advance.
Note: Investment in an FPCI in the form of a Club Deal is reserved for Sophisticated Investors and involves significant risks. It is recommended to consult a financial advisor before making any investment decision.
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What are the primary risks of investing in a Club Deal FPCI?
Investing in a Club Deal FPCI involves financing unlisted companies, often in specific sectors like hospitality. Past performance is not indicative of future results. This type of investment carries specific risks, including:
- Risk of Capital Loss: Investment in an FPCI does not benefit from any capital guarantee. Investors may lose all or part of their invested capital.
- Redemption Lock-up Risk: Unit redemption requests are not permitted during the life of the FPCI, including any potential extensions.
- Liquidity Risk: Since the FPCI is primarily invested in unlisted companies, the Management Company may encounter difficulties divesting securities within a specific timeframe.
- Lack of Diversification Risk: As a Club Deal often focuses on a single project, the fund may not constitute a diversified portfolio. Poor performance by the Portfolio Company would negatively impact the overall performance of the Fund.
- Hospitality Sector Risk: Investments are subject to the inherent risks of hotel businesses (occupancy, operational costs, etc.). No assurance can be given regarding the performance of the hotel assets.
- Sustainability Risk: Risks associated with environmental, social, or governance events that could significantly decrease the value of the investment.
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What is the typical duration of a Club Deal?
The duration of an FPCI in the form of a Club Deal varies according to the Fund Rules. Traditionally, this duration is set at 10 years, with a possibility of extension.
- Regulatory Context: Following the French “Attractiveness Law” (Loi Attractivité) of June 2024, the maximum lock-up period for these funds has been extended from 10 to 15 years.
- Extendam’s Approach: At Extendam, the duration of our Club Deal FPCIs is generally 6.5 years, extendable twice for one year at the Management Company’s discretion. This duration is indicative and subject to the specific characteristics of each fund.
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What are the exit terms for a hospitality Club Deal?
Our Club Deals are structured as Professional Private Equity Funds (FPCI). These funds involve a lock-up of units for holders throughout the life of the Fund.
- Units are generally locked for a minimum period (typically 6.5 years at Extendam).
- No redemption requests are authorized during the life of the FPCI, including any extension periods.
- The exit is typically triggered by the sale of the underlying hotel asset at the end of the investment horizon, leading to the liquidation of the fund and the distribution of proceeds to the investors.
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Why choose Extendam for a hospitality Club Deal?
Extendam is a leader in European hotel asset management, offering:
- Dual Expertise: A combination of operational hospitality knowledge and advanced financial skills.
- Significant Track Record: A proven history of performance in the sector.
- Value-Add Approach: A responsible investment strategy oriented toward active value creation.
- Strategic Partnerships: Solid relationships with renowned European hotel operators.
Marketing communication. Investing involves risks, notably the risk of capital loss. Please refer to the Fund Rules and regulatory documentation before making any investment decision.
[*] As of December 31, 2024.
[**] All investments involve risks, including the risk of capital loss. Past performance is not indicative of future results.
[***] Sophisticated investors within the meaning of Article 423-49 I of the AMF General Regulations and Article L.214-160 I of the French Monetary and Financial Code.
[1] Asset Management: Strategic management of assets to optimize their profitability and value.
[2] Occupancy Rate: Percentage of occupied rooms over a given period.
[3] RevPAR (Revenue Per Available Room): Average revenue per available room, a key performance indicator in hospitality.
Access unique opportunities in the European hotel sector through our dedicated funds.
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