CG Capital Advisory, a private equity fund belonging to the Chirathivat family, is commencing its operations with 10 billion baht in funds, targeting hospitality and real estate investments as the tourism sector continues to recover.
Led by Phoom Chirathivat, CG Capital has joined forces with blue-chip institutional investors in fully committing this capital for investments in hotels and other tourism-related businesses in Thailand's key tourist destinations.
CG Capital announced that its first investment is a 5-billion-baht lifestyle mixed-use project in Phuket, which comprises the Standard Residences Phuket Bangtao condominium and the Peri Hotel Phuket Bangtao, a boutique hotel managed by Standard International. These projects are expected to be launched in April 2024 and completed in 2026.
Mr Phoom, a managing partner and co-head of CG Capital, said the country's tourism has recovered and expanded rapidly post-pandemic as evidenced by the rising number of tourists visiting Thailand, exceeding 28 million in 2023.
He expressed confidence that the number of foreign tourists will soon bounce back and exceed the levels recorded before the pandemic.
"As a result, the outlook for related businesses in the tourism sector is promising with strong growth potential, and CG Capital's first private equity fund was established to capitalise on this development," Mr Phoom said.
Soravit Chairoj, who is also a managing partner and co-head, said the 10-billion-baht fund has been launched with the aim of investing primarily in the country's tourism-related businesses such as hotels, serviced residences, amusement parks and water parks, and related mixed-use projects.
The tourism destinations to be targeted include Bangkok, Phuket, Samui and Pattaya. The fund is set to invest in 3-5 projects annually.
"The fund is established with confidence in the bright future of Thailand's tourism sector, as we trust that in the next 3-5 years, we will continue to see growth in both the quantity and quality of tourists, including expats and digital nomads who consider Thailand to be one of the top destinations in the world," Mr Phoom added.
Investing in projects offering a great deal of potential will help support the development of tourism in Thailand and allow investors to have better opportunities to earn strong returns on their investments, according to the company.
Mr Soravit said private equity is now an alternative investment class that attracts institutional investors due to the agility in management, systematic investment process and criteria, and value creation.
Accordingly, it is now earning a larger allocation of capital in leading institutional investors' portfolios globally, Mr Soravit said, adding that CG Capital is anticipating an 18% interest rate of return (IRR) per year.
"The value of hotel business sales is as high as 12 billion baht, but in 2023 it was quite low at 4 billion baht. I believe this business will come back as foreigners are keen to invest. We will build a good quality hotel. Ready to pass on to the next group of investors," Mr Phoom said.