ECHO closes first fund at EUR152m
ECHO Partners has held the final closing of its first fund, ECHO Fund SCSp with approximately EUR152 million in capital commitments.
Following the first fund closing in July 2019 and the acquisition of three hotels shortly thereafter, ECHO Fund was able to accelerate its fundraising process and close the above the original target size and ahead of the year end closing date. Several institutional banks, pension funds and strategic family offices have subscribed to the fund supporting the institutional scalability of ECHO's strategy. The Founders and employees of ECHO Partners have capital commitments of more than 10 per cent serving as cornerstone to the fund.
ECHO Fund's portfolio currently includes one hotel in Vienna, two hotels in Budapest and the recently acquired hotel Ammonite in Amsterdam. With these acquisitions and one further hotel acquisition targeted for early December 2019 the Fund has invested around 50 per cent of its volume. The average gross acquisition yield of the first four hotels is clearly above 5 per cent offering our investors a locked-in equity yield in the 8-10 per cent range while leaving significant upside through further value increase. ECHO plans to acquire a further 3-5 hotels during the remainder of the fourth quarter 2019 and first half of 2020 and hence completing the investment period.
Roland Rausch, Founding Partner, says: "This is the first fund that we have set up to serve a dedicated investor base with direct access to yielding core hotels in the fastest growing tourism cities in Continental Europe. The Founders and employees of ECHO Partners have invested more than 10 per cent of the Fund and we were able to convince various large institutional investors and strategic investors to invest in our Inception Fund. I would like to thank all our investors and partners for their support and trust in the ECHO team. Due to the continued strong investor demand for our strategy, ECHO is working on establishing a second, more scalable fund in mid-2020."