YOGA, SUNSHINE AND VEGAN FOOD: IS THIS NEW FUND FOR U/HNWIS A BIT OF A STRETCH?
5th Oct 2023 Asian Private Banker
The end of the COVID-19 pandemic has prompted many U/HNWIs in the region to re-assess what matters in their lives and focus more on wellness, whether that be yoga, meditation, scenic views, or plenty of organic vegan food.
But all of this is also providing a number of new opportunities for savvy investors. Among them are wellness retreats, whose business is booming following the resumption of air travel.
One private equity (PE) firm that believes this is a ripe opportunity for healthy returns is Hong Kong-based Alta Capital Real Estate (Alta Capital), which invests in undervalued and undermanaged hospitality assets across Asia Pacific, with a particular focus on Southeast Asia (SEA).
The firm is currently fundraising for its latest lifestyle and wellness hospitality real estate fund, targeting U/HNWIs and family offices, and is looking for a 20% IRR.
Good value and potential returns
Alta Capital’s new fund is targeting US$50 million with a minimum ticket of US$250,000. The final close of the fund is the end of this year, according to Patel. Aside from this fund, Alta Capital’s clients have been participating in real estate projects with direct and co-investments, according to Rakesh Patel, CEO and founder of Alta Capital.
“We see more opportunity in resort over urban, and lifestyle over mass market. SEA offers good value and potential returns. We prefer Thailand given the growth potential and investment framework,” Patel told Asian Private Banker.
The firm has sourced and analysed over 500 hotel opportunities across Asia Pacific since 2021. “20% meet our investment criteria to commence due diligence. Sourcing is ongoing, with recent site visits to Thailand and Indonesia,” he added.
The fund also adopts ‘The Alta Impact Method’, which was developed in collaboration with the Hong Kong University of Science and Technology and aligns with the UN Sustainable Development Goals.
The firm is a regulated private equity fund with a fund management license under the SFC. It currently manages real estate projects in Thailand, Sri Lanka, Indonesia, Spain, France and Australia.
Patel also highlighted to Asian Private Banker that the World Bank, in its semi-annual Thailand Economic Monitor, projects Thailand’s economy to grow by 3.9% in 2023 – up from 2.6% last year – due to stronger-than-expected demand from China, Europe, and the United States, private consumption growth, and a recovery in tourism.
A report from the Global Wellness Institute which looks at growth in the ‘wellness economy’, projects an annual growth rate in wellness tourism of 20.9% from 2020 to 2025, and wellness real estate of 16.9% over the same period.
Yoga, sunshine and vegan food
One of Alta Capital’s flagship projects is the Yoga Wellness Yoga Retreat in Koh Samui, Thailand: Vikasa yoga wellness retreat. It is a prime beach location with a yoga academy and a highly rated healthy restaurant: Vikasa Life Cafe.
“The next step for this project is to refurbish the rooms and common areas, operational efficiencies, upgrading finance and accounting processes, relaunching the sales and marketing plan, and overall institutionalising the business,” Patel shared.
He added that a Singapore-based family office recently showed interest in bringing the Vikasa Life Cafe brand to Asia. As of today, this project had a double-digit IRR and a low single-digit cash multiple.
Prior to setting up his own PE firm, Patel spent more than two decades working for HSBC in both Hong Kong and Japan. His last post was as global head of equity advisory for the bank.
Born and raised in London, Patel until now still practises Yoga and meditation as a way of living. “My mum used to teach Yoga in London in the 1970s and I did two years of detox diet for childhood sickness. So I’m not just an investor of real estate, more like a person who grew up in a wellness family, and now I’m back to wellness after 30 years in the finance industry,” he shared.
Patel and the firm are supported by quite a few industry veterans, including Michael Davies, fund advisor, who has spent 20 years in real estate and hospitality at JLL, Savills, Cushman and Wakefield; and Brian Williams, fund advisor, ex-senior manager at Swire Hotels, Mandarin Oriental and The Ritz London.