Funds managed by Oaktree Capital Management and the Serviced Apartment Company (SACO) have announced plans to merge their serviced apartment interests to create a new £60m business.
The merger was announced at the International Hotel Investment Forum in Berlin, at the same time as Oaktree's CL Serviced Apartments business launched the Beyonder ApartHotel concept.
The combined company, which will operate under the SACO name, will be comprised of both Oaktree and SACO's existing serviced apartment offering, as well as the new Beyonder ApartHotel product.
It will have a portfolio of 1,645 apartments, which includes new transactions on 945 apartments across 10 properties in London, Amsterdam, Edinburgh, Glasgow, Aberdeen and Dublin that are scheduled to open beginning December 2015, along with SACO's existing portfolio of 700 operated apartments across the UK.
The first Beyonder ApartHotel is due to open in London in December 2015.
Lesley Freed, founder of SACO, said: "Oaktree is a highly respected investor with a long and successful track record investing throughout the UK and Europe.
"SACO is pleased to be partnering with Oaktree on this transaction, as we will benefit from both their expertise and capital commitment as we seek to expand our suite of products with the launch of Beyonder ApartHotels, and redefine serviced accommodation by offering our customers a range of options in key destinations across the globe."
The combined company will be led by Stephen Hanton, managing director of SACO since 2012, who will become CEO of its commercial division, and Max Thorne, who has led Oaktree's entry into the serviced apartment sector and the development of the Beyonder ApartHotel concept, who will become CEO of the company's property arm. SACO founders, David and Lesley Freed have re-invested in the combined company and plan to stay actively involved.
Stephen Hanton said: "This transaction marks the exciting next chapter of SACO's growth and development. We have acquired and are developing a unique set of properties for our growing business traveller clientele, whose preferences include more space and better integration into the fabric of the cities in which they are temporarily working and living."
Max Thorne added: "This new serviced apartment business will fit perfectly with the prime city-centre properties upon which we are expanding. Our new Beyonder ApartHotels will complement SACO's existing range of high quality properties and will establish a new standard in this dynamic sector."
Pablo Vélez, a senior vice president in Oaktree's European Principal Group, said: "Oaktree is pleased to be combining its serviced apartment platform with SACO to create an exciting new company. With Beyonder ApartHotels as just one of the many attractive initiatives in the pipeline, the combined company is well-positioned for additional growth and value creation."