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Patron Capital, owner of Generator Hostels, has successfully completed a minority sale of Generator to Invesco of up to 23 per cent in exchange for €60 million of growth capital.
Invesco’s stake in Generator is the inaugural investment by Invesco’s opportunistic strategy, focussed on growth businesses, co-managed by Invesco Real Estate, WL Ross & Co, and Invesco Fixed Income.
The capital will be used to exponentially increase the number of properties across the globe.
This injection of funds by a major global institution confirms Generator as a pioneer in the new breed of accommodation that are urban design hostels and a brand with a bright global future.
Josh Wyatt, Senior Advisor at Patron Capital responsible for the Generator brand, and Chief Strategic Officer at Generator said: “This transaction, via a global institutional capital partner, is a major proof of concept for hostels as an asset class.
“Since Patron acquired Generator in 2007, Generator has built a powerful global brand and revolutionised the hostel experience.
“The €60 million of proceeds cements our valuation premium for Generator and will enable the company to accelerate its growth plans both in Europe and the US, where we believe there is significant potential.”
The chain currently has 5,200 beds in seven cities across Europe, a number that will near 7,000 by 2015, after three confirmed openings in Paris, Rome and the recently announced Amsterdam.
Erik Jacobs, director, hotel fund management transactions of Invesco Real Estate, commented: “Through Invesco’s opportunistic strategy we are now extending our commitment to the hospitality industry beyond the traditional lease model.
“We are excited to be investing in the Generator platform as we see strong fundamentals supporting the hostel segment, and Generator is a market leader in terms of product, design and brand recognition.
“As an organisation, we look forward to assisting Patron with Generator’s ongoing growth by utilizing Invesco’s extensive global network.”