Latin America looks troubled amid the global commodity slowdown, but one big investor sees opportunity amid the gloomy headlines.
George Soros, the founder and chairman of Soros Fund Management appeared to have confidence in Latin America despite its slowing economic growth and weakening investor interest.
The Wall Street Journal reported that Soros’ investment management firm made a $300 million investment in Fen Hotels, an Argentine hotel company, for its expansion in Latin America.
Fen Hotel CEO Patricio Fuks said Soros Fund Management is “looking to get into the region.” The spokesman of the investment management firm declined to comment on the matter, according to WSJ.
Soros’ investment helps finance 5,000 new hotel rooms in Latin America
According to Mr. Fuks, Soros’ investment in Fen Hotels will help finance as much as 5,000 hotel rooms in different countries in Latin America including Argentina, Chile, Ecuador, and Peru over the next three years. According to him, his hospitality company based in Buenos Aires will manage the properties.
Mr. Fuks is focusing its expansion in Latin America because he believes that he can get more from the investments of his partner than in other regions around the world. He noted that the acquiring or constructing new hotels in major cities in the United States were becoming increasingly competitive and expensive.
Building new hotels at reasonable price in Latin America
He emphasized that they could still build new hotels at a reasonable price in the capital cities in Latin America. The region’s economy contracted due to the weakening demand for commodity and foreign investors are exiting their investments. Economist reduced their near-term growth forecasts for most countries in the region.
Fen Hotels currently have 35 hotels across Latin America. It is a big player in the region where most hotels are still family-owned and operated.
The WSJ suggested said Soros’ decision to invest in the development of thousands of hotel rooms in the region is an indication that some seasoned investors have a view that Latin American countries will eventually rebound.
Earlier this month, it was reported that Soros pulled out his $500 million investment in a fund managed by Bill Gross at Janus Capital Group. His decision is a major blow to Gross since Janus Global Unconstrained Bond Fund declined 1.2% and suffered outflows this year.