Where Does HEI get it’s Funding?
Since 2004, HEI’s acquisitions have been funded through three private equity funds launched by the company. These funds have been raised primarily from nearly two dozen university endowments.
HEI actively targets universities as investors, and it advertises their prestige in order to inspire confidence in the company. Because HEI actively uses universities’ investments as an endorsement, it implicitly ties the reputation of these schools to the reputation of HEI.
HEI’s website states:
“Our investors comprise ten of the country’s most prestigious university endowments, all of which have selected HEI as their exclusive vehicle which solely invests in hospitality real estate. These confident, committed, long-term partners consistently invest throughout all phases of real estate cycles, fostering tremendous stability in our investment platform.”
|Fund I (2004)||Fund II (2006)||Fund III (2008)|
|Total Funds Raised||$274 million||$425 million||$500 million|
|Biggest Investors||Yale University, Harvard University||Princeton University, Yale University, Harvard University||Princeton University, University of Chicago, Yale University|
For more information about university investment in HEI, and to read why HEI Hotels is a bad investment for university endowments, read this report.