Pacific Hospitality Group (PHG) has unveiled the PHG Evergreen Fund in advance of the hotel industry Lodging Conference.
The PHG Evergreen Fund applies a long-term strategy through a permanent capital fund vehicle, with an ambitious initial target of securing $250m in commitments to seed the fund.
An evergreen fund is a continuously operating investment structure without a set maturity date. This allowa investors flexibility to enter at different times during the life of the fund.
Once the capital is raised, no additional funds are accepted, and investors are generally not able to redeem their shares until the fund’s assets are sold and the fund is liquidated.
PHG has reportedly averaged an 11.6% net annual cash on cash return and a 25% net annual total return for its investors. The company’s strategy focuses on long term holds of single asset hotel investments.
The fund is slated for an initial closing on 15 November 2023. PHG will continue its strategy of investing in high growth markets with a focus on the sunbelt states – California, Arizona, Utah, Texas, Tennessee, Florida, Georgia, and The Carolinas – as well as Colorado, Hawaii and Washington.
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PHG’s fund comes at a time when US hotel developers are facing a cash crunch as construction lending has dried up across the nation.
PHG head of investments and architect of the new fund Pouya Honari commented: “The Fund mitigates investor risk by diversifying across a portfolio rather than single asset investments, incorporates liquidity provisions, and upholds the tax advantages and return structures our investors have valued for decades.”
PHG was established in 1987 and currently has a portfolio of 12 hotels, specialising in hotel ownership, management, financing, and development.
The company operates the following branded hotels: AC Hotel and Residence Inn Dallas by the Galleria, AC Hotel Phoenix Tempe/Downtown, AC Hotel Irvine, AC Hotel New Orleans Bourbon/French Quarter Area, DoubleTree by Hilton Irvine Spectrum, and DoubleTree by Hilton Santa Ana/Orange County Airport.