Saudi Arabia’s Public Investment Fund (PIF) has purchased a 49% stake in the luxury hotel group, Rocco Forte Hotels, valuing the company at £1.2 billion. This investment is part of PIF’s strategy to expand its luxury hospitality portfolio and also help the group expand worldwide.
Rocco Forte Hotels
Before diving into the specifics of the deal, let’s take a brief look at the history and current standing of Rocco Forte Hotels. The group, founded by Sir Rocco Forte and his sister Olga Polizzi in 1996, comprises 14 hotels and resorts, along with 20 private villas across Italy, the UK, Germany, Belgium, and Russia.
The hotels under this brand include some of the most iconic properties such as Brown’s Hotel in London, The Balmoral in Edinburgh, and The Charles Hotel in Munich.
The partnership with PIF is poised to fuel Rocco Forte Hotels’ expansion plans. The group has planned the opening of three new hotels in the coming years – two in Milan and one in Sardinia.
These properties are expected to open doors in 2024 and 2025. With PIF’s financial support, the hotel group aims to double the size of its hotel portfolio over the next five years.
The Key Players in the Deal
PIF, the sovereign wealth fund of Saudi Arabia, is a significant player in the global investment landscape. With its vast assets made via oil wealth, PIF has been diversifying its investment portfolio across various sectors.
This investment in Rocco Forte Hotels aligns with PIF’s Vision 2030 plan, aimed at reducing the country’s dependence on oil and diversifying its economy.
As part of the deal, CDPE Investimenti, an Italian investor that owned a 23% stake in Rocco Forte Hotels, will be selling its entire shareholding. CDPE Investimenti, owned by Italy’s state-backed fund CDP, had invested 80 million euros in the hotel group in 2015.
A Strategic Move for Both Sides
The investment by PIF in Rocco Forte Hotels is seen as a strategic move for both parties. From Rocco Forte Hotels’ perspective, the partnership with PIF will provide the necessary financial backing to accelerate its expansion plans.
On the other hand, for PIF, this investment aligns with its broader strategy of expanding its global investment footprint, particularly in the European market and the luxury hospitality sector.
This move also reflects PIF’s confidence in the commercial opportunity and the strength of the international hospitality and tourism industries.
A Shared Vision for the Future
According to Sir Rocco Forte, executive chair of Rocco Forte Hotels, PIF is an excellent partner for the company. He stated that they had established an extremely good relationship during the course of their negotiations.
Forte added that they share the same vision for the brand and the group’s future strategy, intending to take a long-term view.
Turqi Al Nowaiser, the PIF deputy governor and head of international investments, echoed these sentiments.
He said that their investment in Rocco Forte Hotels reflects PIF’s confidence in both the commercial opportunity and strength of the international hospitality and tourism industries which have shown remarkable resilience in recent years.
He added that as active long-term investors, PIF would continue to invest strategically in promising sectors to achieve sustainable returns globally.
The Road Ahead
The completion of the transaction is subject to regulatory approval. Once approved, the deal is expected to significantly accelerate Rocco Forte Hotels’ expansion, especially in the Middle East.
Furthermore, it marks a progression of PIF’s strategy to boost its presence in the hospitality sector and expand its global investment footprint, particularly in the European market.
This strategic partnership between Rocco Forte Hotels and PIF is a testament to the resilience and growth potential of the international hospitality and tourism industries.
The future indeed looks promising for both Rocco Forte Hotels and PIF. As they embark on this new journey together, it will be interesting to watch how this partnership shapes the luxury hospitality landscape in the years to come.
More PIF Investments
Saudi Arabia’s Public Investment Fund (PIF) has agreed to purchase a 10% stake in Heathrow Airport, demonstrating its strategic expansion in the global aviation sector. This move is part of PIF’s broader strategy to diversify its investments and support Saudi Arabia’s tourism growth.
The transaction, involving the acquisition from Ferrovial SA and also including a 15% stake purchase by Ardian, a Paris-based firm, is subject to regulatory approvals.