Ctrip Established Cross-border Hospitality Fund in Shanghai FTZ
Ctrip (hereinafter “Ctrip”) together with F&H from Singapore, as well as Meta asset management from China, jointly established a fund management platform – CL Capital Management. CL Capital Management will set up a cross-border hospitality fund in Shanghai Free Trade Zone as the fund manager.
It is reported that the first phase of investment will be placed in the Europe. The economy of Europe has not yet been fully recovered and a lot of high-quality assets are undervalued, which is an ideal timing for investment.
The set-up of the cross-border hospitality fund is also spotted an opportunity for economic recovery in Europe. The first phase is expected to raise funds to 2.5 billion RMB. Ctrip, who will serve as a cornerstone investor, subscribed to 10% of the fund size, the remaining funds will be mainly for domestic institutional investors.
In recent years, with the improvement of national productivity and level of consumption, China’s tourism demand boosts, especially for outbound travel. According to the National Tourism Bureau statistics, in 2014 the number of outbound travel for the first time exceeded 100 million passengers, a daily average of nearly 30 million people in the country. Data shows that in 2014, Ctrip takes China’s outbound travel market share more than 41.4%, the transaction amounted to 6.2 billion RMB, which is more than 50% growth compared to 2013, the revenue growth in the first quarter of 2015 reached the highest level in the last three years.
In the future, the Fund will sign a global strategic cooperation agreement with Ctrip, both sides will share the fund’s resource of the hotel and Ctrip’s online resource of outbound tourism, so as to achieve O2O-service online and offline.
In recent years, with the advance of the RMB internationalization strategy, the pace of cross-border investment from Chinese-funded institutions is constantly accelerating. In the future, the fund will seek investment opportunities on a global scale. Together with an experienced and localized international team, the Fund will not only acquire hotel assets in Europe as its investment plan, but also maximize the efficiency of the global capital markets allocation through various ways to improve returns.
