US fund Orion buys out Cerberus and takes full control of Sotogrande luxury resort

The marina at Sotogrande

The US private equity firm Orion has bought out Sotogrande Luxco – an affiliate of Cerberus Capital Management – to take full control of Sotogrande SA, which owns one of the world’s most famous luxury resorts.

Sotogrande is an upmarket residential golf resort of 2,500 hectares near Gibraltar, in Andalusia’s Cádiz province. It includes various hotels, a yachting marina and sailing club with over 550 moorings, the Santa Maria Polo Club, and four golf courses including Valderrama golf club, which annually hosts the Volvo Masters. On the property side there are developments for sale like Los Cortijos and La Reserva Club, plus lots of villa projects and plots to be had.

Orion purchased 50% of Sotogrande from NH Hotels in a joint investment with private equity fund Cerberus back in October 2014 for an announced price of €225 million. Orion has now bought out Sotogrande Luxco to take over 99% of the business, with plans to acquire the 1% it doesn’t yet own. That will leave the future of Sotogrande in the hands of Orion alone.

Sotogrande is Spain’s flagship luxury leisure and residential resort, and was hotspot for upmarket buyers in the boom years. It suffered along with all developers in the crisis, and went very quiet as it tried to control costs and sell its inventory of new homes in developments like Los Cortijos, where some units are still on the market.

Does this take-over mean that Orion will now get the development and marketing back on track? Aref Lahham, Founder and Managing Director of Orion, has said that the partnership with Cerberus allowed Orion to acquire a unique asset and “provided us the proper platform to develop Sotogrande into a premier residential and leisure destination within Europe once again. Now that the first phase of our repositioning is complete, we are looking forward to our continued engagement and support of the company and its management team towards the realisation of the company’s strategic objectives.”

Mistakes have been made at Sotogrande over the decades, in particular during the boom years, but it’s still one of the world’s outstanding resorts, with huge potential.

Los Cortijos at Sotogrande

Los Cortijos at Sotogrande

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