Hospitality · Realised
GM Hotels
A resilient South Australian pub portfolio.
At a glance
Sector
Consumer
Invested
July 2015
Realised
2023
Status
Realised
Acquired by
Various buyers
The headline
10
Adelaide pubs in the portfolio
8yrs
Held, 2015 to 2023
3
Venues and freeholds added through the pandemic
Background.
- A portfolio of ten pubs based in Adelaide, South Australia.
- The Fortitude team invested in September 2015 and again in October 2021.
- Acquired from Quadrant Private Equity and Next Capital alongside chief executive Greg Maitland.
Our investment thesis.
- A focus on yield rather than capital growth, leveraging cash generative assets bought at attractive entry valuations given where the cycle sat.
- Partner with a highly experienced operator who knew both the assets and the industry well.
- Realise upside through the sale or development of excess freehold land, selective renovations, and the acquisition of additional venues or freehold.
Our results.
- The portfolio was navigated through changing South Australian gaming regulation, in line with our diligence, and through sluggish state growth and then the pandemic, while still delivering earnings growth and regular cash yields.
- Excess land was sold at assumed values and selected venues were upgraded, most of which performed strongly.
- Before the pandemic the portfolio maintained a net cash yield to investors of around ten per cent a year, structured so that the majority of cash distributions were tax deferred.
- The team capitalised on pandemic market adjustments, acquiring an additional venue and the freehold at two existing leasehold venues.
- Assets were sold to various buyers.
Past performance is not a reliable indicator of future performance, and figures drawn from individual deals executed on a deal-by-deal basis are not representative of a pooled fund. Wholesale investors can request the full record.
Could this be your next chapter?
If you are a founder weighing up a partner, see what the journey looks like, or start a conversation, in confidence and with no obligation.