KSL Capital Expected To Grab At Least $1 billion

By
Brad Meikle
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KSL Capital Partners LLC, a relatively new shop based in Denver, is out raising a fund dedicated to acquiring businesses in the travel and leisure industry. Buyouts expects the final tally to come in the $1 billion to $1.5 billion range.

Executives were not available for comment, but the Washington State Investment Board approved an investment of up to $200 million to KSL Capital Partners III LP at its November 18 meeting. The state has backed the firm twice before, committing $100 million to KSL Capital Partners II LP in 2006, and then $50 million last year to KSL Capital Partners Supplemental II TE. The former commitment as of March 30 had generated a 1.14x investment multiple and a 10.6 percent IRR for the state; the latter had generated a 1.23x investment multiple and 29.8 percent IRR.

Altogether KSL Capital has more than $1.6 billion under management, overseen by about 20 investment professionals working in Denver and New York. The firm’s Web site describes the firm as taking a hands-on approach to investing in “complex, operationally intensive businesses.” The firm’s goal “is to first organically increase cash flow, while strategically looking at growth opportunities through development, ancillary revenue and add-on acquisitions.”

Managing Directors Michael S. Shannon and Eric C. Resnick founded KSL Capital Partners in 2005. They had worked together for several years prior to that as executives at KSL Recreation Corporation, an owner and operator of resorts such as the Arizona Biltmore hotel in Phoenix. In 1992 Shannon helped found the company with backing from New York buyout shop Kohlberg Kravis Roberts & Co. Resnick worked as chief financial officer as they grew the business over the following decade. The business was sold for $2.4 billion to CNL Hotels & Resorts in 2004.

The Web site lists seven active investments, including La Costa Resort and Spas, Orion Expedition Cruises, and Western Athletic Clubs. Last month the firm announced an agreement to acquire The Squaw Valley Development Company, operator of a well-known mountain ski resort near Lake Tahoe in Northern California. The firm also said it planned to make $50 million in capital improvements to the resort, founded in 1949 and the site of the 1960 Olympic Winter Games.