Investment giants strike: KKR and Baupost Group expand their influence in the UK hotel sector

The renowned investment firm KKR and the Baupost Group have launched a joint initiative to acquire 33 Marriott International hotels across the UK. The transaction, executed through a subsidiary of the Abu Dhabi Investment Authority (ADIA), marks a significant milestone in the European hospitality industry. Under the leadership of Amante Capital, KKR's European hospitality arm, this partnership will ensure the seamless management of the upscale properties. Mai-Lan de Marcilly, Managing Director of KKR, commented: "This acquisition demonstrates our confidence in the UK market and the resilience of the European hospitality sector." She added: "With Amante Capital, we have created the infrastructure to become a leading acquirer and operator of premium hotels in Europe." The portfolio includes hotels under the Marriott and Delta by Marriott brands, located in major cities such as London, Edinburgh, Glasgow, Leeds, and Liverpool. These facilities with 6,500 rooms cater to both business and leisure travelers, offering amenities such as conference rooms, leisure facilities, and premium services. This acquisition deepens KKR's relationship with Marriott International and makes the joint venture the largest owner of premium Marriott hotels in Europe, the Middle East, and Africa (EMEA). The collaboration aims to provide an enhanced guest experience through targeted investments and operational improvements. Nick Azrack, Partner at the Baupost Group, expressed enthusiasm about the agreement: "This project underscores our opportunistic approach in acquiring high-quality assets. We look forward to working closely with Amante, KKR, and Marriott to fully realize the potential of these properties." Amante Capital will manage the hotels, collaborating with Marriott's UK team to drive further investments and operational excellence. The management plan includes initiatives to reach a broad customer base while maintaining the high standards of the Marriott brands. Since 2016, KKR has invested over $3.5 billion in the United Kingdom, focusing on sectors such as hospitality, residential, and logistics. This latest endeavor aligns with KKR's European strategy for value-added and opportunistic real estate investments and reflects the company's commitment to the long-term growth of the region. The deal was accompanied by notable law firms and advisory companies such as DLA Piper, Ropes & Gray, Simpson Thacher Bartlett, and Burges Salmon. Financing was provided by KKR Capital Markets and Eastdil Secured, while Hamilton Pyramid and Eastdil Secured served as advisors.