NEWS AND INSIGHTS FROM FINTRX
By harnessing the power of the FINTRX Private Wealth Data Platform, we explore five family offices that are channeling their investments into private hospitality companies. Drawing from comprehensive data and research on thousands of transactions from 3,800 family offices around the globe, we offer profound insights into the evolving role and influence of these wealth management firms specifically within the hospitality industry.
166 2nd Financial Services was founded in 2019 as a single-family office tasked with overseeing and investing the wealth of Adam Neumann and his family. Adam Neumann, an Israeli-American entrepreneur and investor, is best known for co-founding WeWork in collaboration with Miguel McKelvey in 2010. WeWork quickly gained prominence as a provider of co-working spaces, offering both physical and virtual shared work environments on a global scale. Before his involvement with WeWork, Neumann also established a children's clothing company called Krawlers.
The core mission of this family office revolves around forming partnerships with dedicated entrepreneurs and proficient management teams who are committed to introducing novel and inventive business concepts to the market. The office sets its focus on delivering substantial value by providing financial backing, operational expertise, and managerial guidance. Presently, 166 2nd primarily channels its investments into ventures related to venture capital, private equity enterprises, and real estate through direct transactions. The office demonstrates a preference for targeting enterprises operating within the realms of technology and real estate, with a specific interest in companies exhibiting considerable growth potential and scalability.
An illustration of the office's investment activities can be seen in its involvement in Alfred. This app-based personal assistant for renters received a $42 million Series C funding round in October 2020, with 166 2nd Financial Services as one of the participating investors. However, in March of 2022, they partook in another injection into the company, a venture round totaling $50 Million dollars. Alfred's flagship product, AOS, serves as a comprehensive residential management software, unifying various aspects of residential living such as resident management, communication, on-site operations, maintenance, payments, and community amenities, as reported by Finsmes.
In the past, 166 2nd has made other large investments in the hospitality sector. For instance in April 2019, the firm took part in a significant Series B funding round for Selina, a prominent hospitality brand. Selina distinguishes itself by offering luxurious accommodations complemented by wellness initiatives, recreational activities, and curated local experiences for its customers. According to Finsmes, this $95 million funding infusion was intended to bolster Selina's technological innovation efforts, enhance traveler experiences, and facilitate expansion into new global markets.
John Pritzker founded Geolo Capital in 2005 to serve as his personal investment vehicle following various individual investment endeavors. The San Francisco-based organization operates as the direct investment arm of the John Pritzker family office. John Pritzker's professional journey began with his family's enterprise, Hyatt Hotel. In 1998, In addition to participating in the investment round, Pritzker also contributed to the initial functioning of the Mandara Spa, a leading spa company in Asia. Over the subsequent three years, Pritzker dedicated his efforts to introducing the company to the North American market. In 2001, Steiner Leisure acquired Mandara Spa. Following these events, John Pritzker and his associate, Tom Gottlieb, promptly established Geolo Capital.
Geolo Capital invests across various sectors including hospitality, entertainment, health, wellness, lifestyle, leisure, and real estate, to name a few. Their focus in real estate centers on hotels and luxury multi-family properties. The group utilizes diverse capital structures like equity and debt, typically investing $10-30 million for 2-5 years with a maximum loan-to-value ratio of 75%. Geolo Capital will engage in co-investment opportunities alongside family offices, individuals, and real estate groups.
In June 2020, Geolo acquired The Hutton Hotel, located in the heart of downtown Nashville. This hotel provides guests with a convenient urban lodging option, immersing them in the city's vibrant atmosphere while offering the comfort of a centrally located and cozy retreat. More recently, in March 2022, the firm took part in a $90 million venture round investment in Placemakr, a company dedicated to creating innovative solutions for urban development and revitalization, aiming to transform underutilized spaces into sustainable communities through a technology-driven approach. According to Cision, this funding will enable Placemakr to acquire more properties and establish developer partnerships across the U.S. to meet growing demand.
JAWS Estates Capital, based in Greenwich, CT, was established in 2014 as the investment vehicle for Barry Sternlicht's wealth. Sternlicht serves as the founder, chairman, and CEO of Starwood Capital Group, a private real estate investment firm boasting a portfolio exceeding $28 billion across commercial and residential lending, infrastructure lending, investing & servicing, and property business segments. Leveraging his extensive expertise and visionary leadership, Sternlicht has strategically positioned JAWS Estates Capital to capitalize on unique investment opportunities in the ever-evolving market.
Currently, the office oversees asset allocation spanning diverse classes and strategies, with a pronounced emphasis on real estate, venture capital, private equity, and direct investments. Notably, their focus extends to the consumer and technology sectors. JAWS Estates displays a keen interest in varied fields such as food & beverage, analytics, fashion, and eSports and has recently made significant investments in the hospitality space.
In January 2022, JAWS acquired Miami Beach's Standard Hotel located at 40 Island Ave. The property was procured from Amancio Ortega, the owner of Zara, for $62 million, as reported by The Real Deal. Despite the pandemic, this waterfront hotel has demonstrated strong performance, offering rates starting at almost $600 per night. Given Sternlicht's residence in Miami Beach, this investment reflects a commitment to his local community. JAWS has made other past investments into hospitality, including active participation in a $160 million series B funding round for Lyric taking place back in April 2019. Lyric specializes in providing fully furnished rental accommodations, presenting an alternative to traditional hotels for both business and leisure travelers, with the goal of offering a space that feels like home for their guests.
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August 18, 2023
Jonathan Lischetti is a member of the FINTRX research & data team, dedicated to delivering targeted and relevant family office & registered investment advisor (RIA) content & insights.