Saudi wealth fund buys 49% stake in luxury hotel chain Rocco Forte

Sir Rocco Forte’s luxury hotels group has agreed to sell a 49% stake to Saudi Arabia’s sovereign wealth fund in a deal thought to value the owner of the Balmoral and Brown’s hotels at around £1.2 billion.

Rocco Forte Hotels said Saudi’s 700 billion US dollar (£552 billion) Public Investment Fund (PIF) is snapping up the “significant” minority stake with aims also to invest in the group to help it expand further worldwide.

Founders Sir Rocco and his sister Olga Polizzi will keep a 51% stake in the firm and remain as executive chairman and deputy chair respectively, but Italian sovereign wealth fund CDP Equity will sell its entire 23% shareholding as part of the deal.

It is understood that four of Sir Rocco’s five sisters will also exit the firm.

The deal marks the latest swoop by Saudi Arabia’s sovereign wealth fund to invest in UK assets and comes amid a spate of Middle East investments on these shores.

A planned Abu Dhabi-backed takeover of The Daily Telegraph is currently being investigated by regulator Ofcom.

Culture Secretary Lucy Frazer last week intervened in the proposed sale of the Telegraph and Spectator to RedBird IMI, the investment fund behind the purchase, on concerns over the potential impact on press freedom.

Saudi’s PIF also recently agreed to buy a 10% stake in Heathrow Airport.

The Rocco Forte stake purchase adds to its existing interests in luxury hospitality, having already bought minority stakes in hotel groups Aman Resorts and Habitas last year.

Sir Rocco said: “PIF is an excellent partner for us going forward.

“We have established an extremely good relationship during the course of our negotiations.

“They share the same vision for the brand and the future strategy of the group with the same ambition to take a long-term view.”

The PIF, which has invested in other transport sites, technology firms and sports teams such as Newcastle United FC, has more than 700 billion US dollars (£552 billion) in assets.

It is controlled by Saudi Arabia’s Prince Mohammed bin Salman Al Saud, whose government has been subject to accusations over human rights violations.

Turqi Al-Nowaiser, deputy governor and head of the international investments division at PIF, said: “Our investment in Rocco Forte Hotels reflects PIF’s confidence in both the commercial opportunity and strength of the international hospitality and tourism industries that have shown remarkable resilience in recent years.”

Rocco Forte hotels, which was founded in 1996, has 14 hotels and resorts, as well as 20 private villas across Italy, the UK, Germany, Belgium and Russia.

It plans to open three hotels in 2024 and 2025.