Coronavirus pummels private-equity bets in hospitality, entertainment - Business Insider

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Private equity bet billions on ski resorts, water parks, and casinos in 2019. Here's how coronavirus has turned that investment thesis on its head.

But now, amusement parks and resorts are closing to visitors and the spread of coronavirus is keeping people at home.

"We continue to be big believers in the sector and these are extremely high-quality assets," a spokesman for Blackstone told Business Insider. Attorneys and consultants told Business Insider that the leisure and hospitality industries have been especially hard hit by the coronavirus and that private-equity firms with investments in these areas are looking at providing their portfolio companies with cash during the downturn.

Typically, a private-equity firm will manage a company for between three to seven years before selling it, ideally for a profit, and any economic turmoil that occurs between that buying and selling will change how a firm manages its investment. Right now, private-equity firms are looking into short-term liquidity solutions for their portfolio companies, while also

At one of his companies, senior management took a 50% pay cut to keep essential service staff intact to keep business operations going, he said. Another company in which KSL Capital is a controlling shareholder, ski resort conglomerate Alterra Mountain Company, shuttered resorts coast to coast from Squaw Valley to Steamboat, to help stop the spread of coronavirus, he said.

 

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