Odyssey Asset Management Ltd, a sister company of alternative asset manager Odyssey Capital, has announced the first close of its Japan-focused private equity real estate fund – Odyssey Japan Boutique Hospitality Fund – with aggregate commitments of $200 million.
The fund, launched in June 2018 to focus on the acquisition of boutique hospitality assets throughout Japan, achieved the first close at the end of January. It bagged commitments from high net-worth individuals, family offices, and large financial institutions across the Asia-Pacific region.
Odyssey Capital Group co-founder and president Daniel Vovil told DEALSTREETASIA in an email interview that the fund is targeting $500 million in equity and total asset size of $1 billion by the end of the year. The next close for the fund is expected to take place around May this year.
The fund will focus on mid-sized hospitality real estate assets valued between $5 million and $50 million. This price range, Odyssey said, demonstrated the best value to secure “under-valued, off-market hospitality properties with the most value-add potential”.
In a statement, Odyssey said the purpose of the first close was to acquire one of the fund’s flagship projects, Project Falcon, a 24 machiya (traditional townhouse) property portfolio situated in the heart of Kyoto. Odyssey will refurbish and convert the properties into a single urban luxury machiya resort.
“The acquisition of Project Falcon makes the Odyssey Japan Boutique Hospitality Fund one of the largest owners of machiyas in Kyoto,” the firm said.
Project Falcon brings the fund’s total hospitality assets in Japan to three. In August 2018, the Odyssey Japan Real Estate investment acquired Shosenkaku Kagetsu, a Japanese-styled traditional ryokan (Japanese inn). It also purchased Hotel Owan Hanami, a boutique hotel in Kyoto, in October.
The fund is expected to make three new acquisitions in the first quarter of this year, including a boutique hotel in Shibuya, one of Tokyo’s most popular suburbs, and a number of ryokans on the Izu Peninsula.