The bells ring out for Rocco Forte

It was one in one out with sovereign wealth funds this week, as Italian sovereign wealth fund CDP Equity exited at Rocco Forte Hotels, to be replaced by PIF, the entity in charge of Saudi Arabia’s future wealth.

A lot of responsibility for one industry to take on board, particularly an industry which does not have a history of being core to anyone’s investment strategy. The good news for any Saudis reading this is that diversity is more than just an aspiration at PIF and those attending any company-wide bashes will be rubbing shoulders with a whole smorgasbord of shipping, cement, ceramics, green power, Blackstone and something called Magic Leap. Sometimes knowledge is not as fun as speculation, so we’ll leave that one with you.

But back to our niche. According to the Financial Times, the deal values Forte’s group of 14 hotels across Europe at £1.2bn and implies an enterprise value, including debt, of £1.4bn.

Turqi Al Nowaiser, deputy governor and head of international investments division at PIF, said all of those diversity things, commenting: “Our investment in Rocco Forte Hotels reflects PIF’s confidence in both the commercial opportunity and strength of the international hospitality and tourism industries that have shown remarkable resilience in recent years. As active long-term investors, PIF will continue to invest strategically in promising sectors to achieve sustainable returns globally.” 

A good day out for Sir Rocco Forte, executive chairman, at the brand which has failed to achieve its full potential for a while – although had seen some growth in recent years – and who said: “PIF is an excellent partner for us going forward. We have established an extremely good relationship during the course of our negotiations. They share the same vision for the brand and the future strategy of the group with the same ambition to take a long-term view. I look forward to working with PIF to expand the group and improve the high level of service we offer our customers. 

PIF’s investment will include an element of primary equity which will accelerate the brand’s expansion in both existing and new global markets. Forte is said to be planning a trip to Saudi Arabia, because the first rule of hotel investment is there’s no point if you can’t hang out in your own local hotel.

Other than it’s nice to see hoteliers doing well, no matter how many Brexits they support, why should we care?

It is further illustration of support for the luxury sector – it is, after all, nice to own pretty things. But what of PIF’s aspirations outside just having access to a lot of fancy stuff in Italy? PIF also has a stake in Aman Resorts, dating from 2022, which is the holy batfink batman of luxury hotel action, so it knows quality when it sees it.

It was, however, an earlier adopter of hotels, buying into AccorInvest in 2018. AccorInvest is currently rumoured to be selling off €2.1bn of assets to make things, well, more streamlined. Another group looking to be more streamlined is Accor, which still has a 30% stake in AccorInvest and would like to get out of that if at all possible. The sector is also widely agog about the when’s and the wherefores of Accor selling off either its luxury division or economy.

Obviously we’d love all our dreams to come true and for it to go to Marriott, but we’ll also take a Hyatt if possible.

All of it gives PIF plenty to get its teeth into, should it feel so inclined. As ever with the hotel sector, the cog of one deal sets off the timer on many others. What a festive chime.

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