Destination Capital PTE., LTD., (DC) and KTB Securities (Thailand) Public Company Limited (KTBST SEC) announced the launch of DESCAP 1 Private Equity Trust, which will acquire hotels in Thailand targeting investor returns of up to 15% per year. This announcement comes after DC signed agreements with KTB Securities (Thailand) Public Company Limited (KTBST SEC) as the settlor and the Trust Manager and MFC Asset Management Public Company Limited (MFC) as the Trustee, to capitalize and launch DESCAP 1 Private Equity Trust.
objective of DESCAP 1 Private Equity
Trust is to raise THB 2.5 billion through its trusted partnership with KTBST
SEC and MFC, offering an alternative asset class for investor portfolios. The
trust will acquire freehold four star hotels of 150 – 250 rooms in prime
destinations of Bangkok, Pattaya, Hua Hin and Phuket which are viewed as
destinations expected to rebound the quickest after COVID-19.
investment strategy is to acquire urban and resort hotels and then renovate,
reposition, and rebrand them to increase value of the properties in order to
generate meaningful returns to investors. Utilizing the experience gained by
Destination Group with its 24-year track record in Thailand of buying,
managing, and selling hotels, particularly during times of distress, DESCAP1
targets a 15% p.a. returns with a 5-7 year holding period.
Capital will source, acquire, reposition and asset manage hotels acquired by
DESCAP 1 Private Equity Trust, with KTBST SEC acting as Trust Settlor and Trust
Manager and MFC as Trustee under this SEC regulated structure,” said Mr. James A. Kaplan, CEO of Destination
Capital PTE. LTD. (DC), adding
“We are pleased to play such an
important role to support the rejuvenation of the Thai travel and tourism
industry with the announcement of DESCAP 1 Private Equity Trust. This trust
will invest in strategic hospitality assets to facilitate re-employment and
hotel re-openings to re-launch Thailand as a preferred global travel
destination. This could not have been done without the support of our Trustee
and Trust Manager.”
Thitiphat Thaveesin, Executive Vice President, Corporate Finance Solutions
& REIT Department of KTB Securities (Thailand) Company Limited (KTBST SEC) said
that the investment highlight of DESCAP 1 Private Equity Trust are as
follow; this is the right time to acquire strategic hospitality assets at lower
price (target with at least 30% discount from neutralized fair value). DESCAP 1
can enhance asset value through Destination Capital’s proven strategies and
track record including renovation and repositioning of the assets. Investing in
DESCAP1 is in a low-volatile asset class with superior risk-adjusted return
expected at 15% p.a. ++. Besides, investing in DESCAP1 is also a way to support
and rejuvenate Thai travel and tourism industry.
DESCAP 1 Private Equity Trust has three investment
strategies, which are
1. Investment Strategies
which focus on acquiring beachfront or fronting beachfront properties such as
Pattaya, Hua Hin, Phuket, and major travel destination in Thailand. For
Bangkok, the trust focus on acquiring hotel in CBD locations. The trust will
focus on acquiring between 4 – 6 four-to-six star hotels up to 8 hotels with
target hotel properties ranging from 150 keys to 250 keys.
2. Value Creation, the trust
will invest in a low-volatile asset class with 5R strategies, which are
Renovate, Rebuild, Rebrand, Reposition, and Recapitalization.
3. Exit strategies, IPO / REIT which
is exit through the Stock Exchange of Thailand), Merger & Acquisition – M&A
which is selling the shares to a larger firm or potential buyers), Trade-Sale
which is selling shares or assets to other investors, venture capitals, or
private equity investment, Buyback which is owners buyback shares or
assets, and Liquidation which is selling all shares to potential buyers.
DESCAP 1 Private Equity Trust has
target commitment amount at THB 2.5 billion with five years plus two one-year-extension
of investment term. The trust has the target return at 15% per annum.
The target group of DESCAP 1 Private Equity Trust is institutional
and/or High-Net-Worth Investors with the minimum investment amount of THB 200
mm per person and it is planned to launch during November 2020. In case the
investment amount is less than THB 200 mm, High-Net-Worth Investors can invest
through the Mutual Fund.