Bain Capital and Smith Hill Capital Launch $1 Billion Private Lending Platform

Bain Capital Special Situations (Bain Capital) and Smith Hill Capital (Smith Hill), an affiliate of Procaccianti Companies, have announced the formation of a joint venture to originate debt and preferred equity to serve the financing needs of companies and assets in the hospitality sector.  

The platform launches with the objective of deploying $1 billion of gross capital over the next several years.

The joint venture will initially focus on new loan originations and debt refinancing exclusively in the hospitality space within primary and secondary markets throughout the US.  In select instances, Bain Capital and Smith Hill Capital will seek to acquire debt and provide rescue capital to high-quality borrowers.

David DesPrez, a Managing Director at Bain Capital, said that rising interest rates coupled with lender pullback in the real estate debt capital markets has created a significant opportunity to deliver flexible financing solutions to high-performing, growth-oriented hospitality borrowers.

“We believe our joint venture with Smith Hill Capital is tailor-made for this moment in hospitality because it combines decades of industry and capital markets experience with a highly attractive market opportunity,” DesPrez said.

Brendan McCormick, Managing Principal of Smith Hill Capital, said that Bain Capital has a long-standing reputation as a premier investor and partner and its team shared their conviction for the hospitality space.

“Smith Hill Capital was formed to build upon Procaccianti Companies’ long and successful track record in the sector.  We are appreciative of the opportunity to partner with Bain Capital, and together look forward to executing on our strategy to originate loans and provide liquidity to investors of institutional-quality hospitality assets in demand-driven growth markets throughout the US,” he added.

Bain Capital has a long history of supporting the growth of global hospitality companies.  The firm’s experience in the sector includes Apple Leisure Group, Hard Rock Hotel Marbella, Hotel Don Carlos, Marriott International, Inc.’s EDITION brand, Ooedo Onsen Holdings, and Pyramid Global Hospitality.

James Procaccianti, Chief Executive Officer of Procaccianti Companies, said that they were keen to deliver meaningful financing solutions direct to the hospitality sector through this tremendous partnership.

“This relationship augments our decades of hospitality management and development expertise, resulting in a fully integrated approach designed to help ownership groups overcome the financing and liquidity challenges currently facing the hospitality sector,” he added.

Earlier Acquisition

On 31 August this year, Bain Capital acquired 100% shares of Sunshine Leases, a Greek financial leasing subsidiary of Piraeus Bank S.A.

The transaction includes a portfolio of non-performing exposures (Sunshine Portfolio), by Hellas Capital Leasing Single Member Société Anonyme (“CL), a Greek leasing company wholly owned by funds managed or advised by Bain Capital.

The Sunshine Portfolio comprises a gross book value of $527.37 million. The collateral securing the leases comprises mostly commercial real estate and hotel assets.

This is Bain Capital’s fifth large-scale acquisition of non-performing exposure portfolios in Greece following projects HCL-EGEE, Amoeba, Icon, and Frontier. Sunshine Leases is Bain Capital’s sixth transaction of leasing portfolios in Europe, a sector in which it has acquired $2.95 billion of gross book value receivables.