Connection Capital invests in Bredbury Hall Hotel & Country Club
for $6m

Connection Capital’s clients acquired a 51% equity stake in Bredbury Hall Hotel & Country Club through a debt financing strategy that leverages the hospitality sector's recovery potential post-COVID-19. The acquisition, completed in May 2021 with £4.4 million of senior debt at a 51% loan-to-value ratio, positioned Connection Capital to capture equity-like returns from a relatively low-risk debt position. This approach was facilitated by the market’s reduced availability of senior bank lending, allowing private investors to capitalize on undervalued assets. The deal's financing structure included £4.4 million in senior debt for acquisition costs, renovations, and working capital. The loan-to-value ratio reflects an understanding of both current market conditions and historical financial performance prior to the pandemic. Post-acquisition, Bredbury Hall is expected to generate a 2.1x return over time, driven by its strong pre-pandemic revenue base and strategic location in Stockport. This investment shifts competitive dynamics within the hospitality sector by demonstrating the viability of a recovery-focused strategy for distressed assets. The collaboration with Vine Hotels, an experienced hotel operator, enhances operational capabilities and mitigates risks associated with property management and marketing. By acquiring Bredbury Hall at a discount to its pre-COVID valuation, Connection Capital’s clients gain a foothold in a market poised for resurgence. Post-close, key challenges include integrating the newly acquired asset into the broader portfolio and executing planned renovations efficiently to meet financial targets. The investment team will need to monitor macroeconomic factors affecting tourism and business travel to ensure steady revenue growth. Successful execution of this strategy positions Connection Capital’s clients well for future opportunities in undervalued hospitality assets as the sector continues its recovery trajectory.