Miami Investors Close Landmark $30 Million Deal in Colombia Luxury Resorts Investment

It's only a starter, but Miami-based Brilla Group has become the first global player to commit and arrange a total $30 million to grow Colombia's luxury hospitality assets. 

It's the biggest commercial real estate deal the South American country has witnessed in decades.

Brilla Group plans to increase the total investment package later this year.

The Colombian Beachfront Hospitality Private Equity Fund will spend the money in the Colombia Caribbean Corridor.

Brilla Group's news release states the fund is the first of its kind in the country dedicated exclusively to investment in luxury hospitality assets.

The fund will house investments from Colombian institutions, including Bancoldex (Colombia's Foreign Trade Bank) and local pension funds.

For Brilla Group, a private equity firm, the fund also represents a milestone as its first investment vehicle backed by institutional capital.

The fund will be regulated by the Colombian Financial Superintendent (Superintendencia Financiera de Colombia) and administered by Fiduciaria Bancolombia S.A. of Grupo Bancolombia (NYSE:CIB; BVC: BCOLOMBIA Y PFBCOLOM), a Latin American financial group "seeking to establish lasting relationships based on trust and respect," according to the  release.

Grupo Bancolombia offers a wide portfolio of products and services to its nearly seven million individual and institutional clients, through a regional platform that comprises the largest banking network in Colombia.

Fiduciaria Bancolombia is the largest fiduciary company in the Colombian Market with about $25 billion in managed assets, seven private equity funds (AUM: US $941.5 million), 13 mutual funds (AUM US $4.05 billion) and more than 900 trusts.

The fund has eight years to invest both in operational luxury hotels and in new hotel construction. 

To do that, the fund will set up joint ventures with local and international investors as well as work with local and international hotel brands.

"Colombia has become a major economic player in the region : foreign direct investment (FDI) alone has brought in a total of US $7 billion in the first half of 2.011, an increase of 91%, and tourism has grown at a rate of 10.6% annually, four times higher than the global growth rate," says David Brillembourg, chairman and CEO of Brilla Group.

"We saw Colombia as a premier investment market due to the scarce hotel supply to satisfy the growing demand, especially in the luxury hospitality sector."

Brillemburg says "this imbalance, combined with a strong economy, continuous sustainable growth, and stable government creates an excellent investment opportunity in our asset class."

"Private equity investors' interest in Colombia has grown exponentially in the last few years," says Fuad Velasco, President of Fiduciaria Bancolombia.

"Brilla Group was early to recognize this market opportunity, and worked diligently to raise institutional capital and create a sophisticated investment vehicle in line with international standards, to provide investors with the best possible investment option."

Velasco says his organization considers Brilla Group "an ideal general partner to work with and manage the fund."

He says the fund will follow the guidelines of Institutional Limited Partners Association (ILPA), an international organization whose mission is to offer tools for training, research, best practices, private equity investment processes. 

The LPA also regulates "the guiding principles between limited and general partners to guarantee transparency and alignment of interests."

Brilla Group focuses on the luxury beachfront hotel and resort asset class in South Florida, the Caribbean, México, Central America, and Colombia. 

The company says it specializes in creating tailored investment solutions for institutional investors, high-net-worth individuals and family offices.

Brilla Group  currently has $150 million of assets under management in México, the Bahamas, French West Indies, British West Indies, Miami Beach and Bal Harbour,  FL.