Explorer Nears Landmark €660M Acquisition of Discovery Hotel Fund
The Portuguese real estate market is poised for one of its largest transactions of the year, as asset management firm Explorer is in the final stages of acquiring the Discovery tourism fund from a consortium of banks for an estimated €660 million. The investment thesis for the acquisition is centered on the high quality and significant appreciation potential of the underlying assets, which include some of Portugal's most iconic luxury hotels. The portfolio holds the renowned Six Senses Douro Valley, the recently launched eight-property Octant hotel chain, the Eden Resort in the Algarve, Dolce CampoReal near Lisbon, and the Ramada Lisbon Hotel. This move represents a significant consolidation in the luxury hospitality sector and a major vote of confidence in the future of Portuguese tourism.
The target assets are held within the Discovery fund, a vehicle created in 2012 and managed by Explorer to hold and manage tourism-related properties that had come onto the balance sheets of several major banks. The fund's net asset value was reported to be approximately €800 million at the close of 2024, indicating the substantial value appreciation of the assets under its management, fueled by Portugal's tourism boom and a favorable investment climate. The acquisition by Explorer is seen as a strategic move to take full control and steer the next phase of growth for these properties.
The transaction is structured as a leveraged buyout, with the selling banks—primarily Novobanco, BCP, and Caixa Geral de Depósitos—providing a vendor finance package of around €500 million. Explorer, the acquiring entity led by Elizabeth Roth and Rodrigo Guimarães, will inject €160 million in equity. This financial engineering is common in deals of this scale and allows the banks to facilitate the sale while reducing their direct exposure to the real estate assets, which are capital-intensive under banking regulations. Other financial institutions with smaller stakes include Oitante and Banco Montepio.
The rationale for the deal is compelling for both sides. For the banks, it represents a successful exit from a long-held, complex fund, freeing up capital and reducing risk-weighted assets. These institutions have been seeking to divest from such legacy funds for years to clean up their balance sheets. A previous attempt to sell the Discovery fund in 2021 with the advisory of Houlihan Lockey did not come to fruition, making the current deal a significant milestone. For Explorer, it is an opportunity to gain full ownership of a portfolio they already manage and are intimately familiar with, allowing them to implement long-term value-creation strategies without the constraints of the fund structure, which was set to mature in 2027.
Market analysis indicates that the timing is opportune. The Portuguese tourism sector has shown remarkable resilience and growth, and the recent stabilization of interest rates has provided a clearer path for financing and investment. The luxury segment, in particular, has performed exceptionally well, attracting international visitors and commanding high average daily rates. The acquisition of these prime assets by a specialized manager like Explorer is expected to lead to further investment in property upgrades and operational enhancements, potentially setting new benchmarks for the luxury hospitality market in Portugal.
While sources close to the deal, first reported by ECO, confirm that the terms are largely agreed upon, final negotiations are still underway. Neither Explorer nor the primary banks involved have issued official statements regarding the transaction. The successful completion of this deal will not only be a landmark for the Portuguese real estate market in 2025 but will also reshape the ownership landscape of some of the country's most prized tourism assets, signaling a new chapter of strategic management and growth.
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