KSL Capital Partners closing Asia office

KSL Capital Partners is closing its office in Singapore by the end of March after less than four years of having a closer presence to the ground in Asia.

A five-member team, including head of APAC hospitality Tony Chisholm and director of investments APAC Siddhant Jhunjhunwala, is understood to be handing over the portfolio to KSL headquarters in Denver and its office in London, both of which will henceforth oversee Asia.

Former principal and head of Asia, Tina Yu, had relocated to London last year as principal Europe.

KSL declined to answer directly questions posed to it by Hotel Investment Today, but it issued this statement: “Following a careful review, we have made the decision to wind down our small Singapore office in favor of investing more heavily in company-specific resources to better support growth and operational excellence across our portfolio. We will continue to identify additional opportunities to deploy capital in the region.”

The closure comes as KSL continues to expand in Asia. Last year, it bought the W Maldives (shown above) and the Sheraton Maldives Full Moon Resort & Spa, from a joint venture between Universal Enterprises and Marriott International, for an undisclosed sum. The deal, one of the largest open-market transactions in the Maldives, was hailed as the M&A of the Year at HICAP 2022 last October.

Last year also saw its Australia-based Baillie Lodges, which KSL acquired in 2018, snapping up a majority share in Chile’s Tierra Hotels, whose collection includes three luxury lodges in Patagonia, Atacama and Chiloe Island. This followed the purchase of New Zealand's Huka Lodge in 2021 and Vancouver Island’s Clayoquot Wilderness Lodge in 2020 – all in line with the aim to position Baillie Lodges as a leading global luxury lodging brand.

KSL also owns the Four Points by Sheraton Sydney, Central Park, which it acquired in 2021, and holds a significant minority stake in Soneva, a deal sealed in 2019, among other properties in Asia. Its Outrigger Hospitality Group, acquired in 2016, went on to buy a trio of Manathai resorts in Thailand's Phuket, Khao Lak and Samui in 2021, and the fully renovated Maafushivaru Resort Maldives in 2022.

With such growth, and with Asia emerging from pandemic doldrums, it “seems odd [to close the office], when they have active investments here,” said a hotel investment consultant in Singapore.

The Asia office executes KSL’s vision: increase asset value by working collaboratively with management teams to formulate and execute an ambitious business plan, increase cashflow, look at strategic growth opportunities across development, ancillary revenue and, where appropriate, add-on acquisitions. Founded nearly three decades ago, KSL focuses only on travel and leisure investments. Since 2005, it has raised about $18 billion of capital across equity, credit and tactical opportunities funds.

One speculation around the reason for the office closure is that the firm might not be getting its targeted amount for its latest travel and leisure focused private equity fund, KSL Capital Partners VI ( KSL VI). According to a Bloomberg report. KSL was aiming for $3 billion. A shortfall might lead to more tempered ambitions in Asia and a greater focus on other regions.

KSL has not announced the final closing of KSL VI. In 2019, it announced that KSL V closed at $2.7 billion. Investors included state pension funds, corporate pension funds, sovereign wealth funds, endowments, foundations, insurance companies and family offices.

Another view is that a bigger and growing APAC portfolio spread over diverse countries could precisely be the reason to re-assess how best to manage activity in the region. Indeed, KSL's statement to “invest more heavily in company-specific resources” alluded to a strategy that recognizes each partner has a unique growth strategy and business model, thus would best benefit from dedicated resources to assist in executing their objectives rather than support from a single regional office, according to a source close to KSL.

According to the source, the company remains committed to Asia and is excited about its investments in the region and their prospects. It is also treating each impacted employee with “utmost respect,” providing the resources and support they need to transition to the next step in their careers.”

It is believed that relocations are also being offered where possible.

Even if the closure of the Asia office surprises its hotels and partners in the region, no one is likely to show it.

When approached about the decision, Jeff Wagoner, president and CEO of Outrigger Hospitality Group, said, “KSL is a staunch supporter of Outrigger Hospitality Group’s growth in premier beach resort destinations across APAC and the world. The expertise its team provides Outrigger is invaluable and our connectivity to deals will remain no matter the destination.”

Wagoner added that Outrigger currently has a robust pipeline of development opportunities in the APAC region and is working closely with its Thailand-based office, the APAC broker community and KSL’s international network of resources.