DoveHill Capital Management has launched DoveHill Opportunity Fund II (Fund II), an investment vehicle focused on three competitive-edge strategies: experiential hotels; structured equity; and opportunistic value-add.
With Fund II, DoveHill aims to raise $30 million to further capitalize on its highly differentiated strategies and seeks long-term partners who appreciate the unique advantages of both on- and off-market deals and the ability to invest directly with a vertically integrated investment manager, according to the company.
Jake Wurzak, founder/CEO, DoveHill, said, “We enjoy the unique advantage of being able to source both on- and off-market deals for our investors. DoveHill has always had an advantage in sourcing opportunities not only through brokers but also through our relationships and reputation in the industry. We’ve created an investment ecosystem allowing us to invest in various parts of the capital stack with best-in-class institutional partners, family offices and high-net-worth investors. In short, we offer our partners entry into a spectrum of deals that they could not otherwise access.”
Fund II is founded on the strategies of DoveHill’s Fund I, which had 10 investments totaling more than 4,600 keys and $640 million under management within three years, producing an expected gross equity multiple over 2.0x and 20% IRR. Preferred equity investments made within Fund I represented 50% of the fund’s investments and 90% of the investments in the fund were sourced through our proprietary off-market network.
Preferred equity will remain a key focus of Fund II, given the current market cycle which is allowing for asymmetric return that is further enhanced by DoveHill’s proven ability to structure unique preferred equity investments and act as a strategic partner.
The core strategies of Fund II, as with Fund I, are opportunistic on- and off-market acquisitions, structured equity and experiential hospitality in markets with high barriers to entry.
Traveler preferences have shifted post-pandemic and, now more than ever, travel experiences are prioritized over many other discretionary personal and corporate expenditures which will result in significant value-creation opportunities for non-commoditized hotels.
Charles Paloux, EVP, investments, DoveHill, said, “Our focus is on unique deals where we can add immediate value. We have access to deals most don’t, and this allows us to establish a track record that has put us at the table with best-in-class funds in the space.”
