Private equity firm Montefiore Investment, which has been around for 16 years, has remained out of the limelight while making small investments across other sectors. Its most well-known deal was its sale to Expedia Group of Auto Escape Group. Montefiore played a prominent role in helping many French travel companies escape the pandemic.A group of 16 French institutional investors created a fund worth approximately $210 million (173 millions) to support the country's leisure and tourism businesses during the pandemic. They sought applications from several dozen institutions and firms to manage the fund. The French Insurance Federation selected Montefiore to manage the Nov Tourisme Relance France fund.Montefiore, a Paris-based private equity company, manages approximately $2.74 billion (2.3 Billion) in equity. It raised about 43% of that amount in 2019.It has separate discretionary management of Nov Tourisme, which decides on the French companies that the fund will invest in.Nov Tourisme funds have average check sizes of $6 million (5,000,000) to $18 Million (15,000,000). The fund can take equity or quasi-equity stakes and is usually a minority shareholder. So far, the fund has invested approximately $85 million (70,000,000) in capital.Voyageurs du Monde Group is a group of travel agencies that the Nov Tourisme fund invested in. Avantage is its holding company. Nov Tourisme was part of the $155 million (130million) fundraising announcement in March. This brought in Certares and existing investors Crdit Mutuel Equity and Bpifrance.When there's no pandemic, it has a great, profitable business model, according to Eric Bismuth CEO of Montefiore Investment. It is free of debt and has plenty of cash.Voyageurs du Monde creates bespoke, complex multiday trips using its Voyageurs du Monde or Comptoir des Voyages brands. They make it easier for travel agents to use tech tools. Agents plan and service vacations using a combination of chat and phone calls.Bismuth stated that it offers customized travel directly to customers through a digitally enabled service model. It is not competing with other companies that sell a standard offering.Audley Travel is an international competitor.The group offers adventure travel through its brands Terres dAventures and Allibert Trekking.The next strategic move for investors is to aid in the internationalization of the brands by making targeted acquisitions as the pandemic subsides.Bismuth stated that the company's global exposure is still very limited at this point. It must be placed to accelerate.Bets on Travel Experiences & ActivitiesNov Tourisme also invested in Paris Exprience Group earlier this year, which offers specialized tourist tours. Paris City Vision, Paris Seine and Localers are the brands of these groups in the activities and tours space. These brands served approximately 400,000 people a year prior to the pandemic.Nov Tourisme held a substantial minority stake (well over, say, 15%), which represented a capital raise in excess of $13 million (11,000,000). Since 2015, Ekkio Capital has controlled Paris Experience Group. Montefiore is currently fine-tuning its strategy and aiming to reduce its debt. He also looks for back-office marketing efficiencies and efficiencies between the two brands that specialize in cultural activities and excursions.MMV, which specializes in French mountain holidays, was also a target for the fund. Nov Tourisme was part of a $19 million (16million) capital raise. This included Jean-Maorc Filippini (co-founder), Bpifrance and Arka Capital. MMV has been able to benefit from an increase in European domestic holiday travel. The company recently appointed a new chief operating officers to help accelerate its growth. This includes the acquisition and opening of hotels and club residences in Alps.Travel Industry Active InvestorMontefiore was chosen to manage the Nov Tourisme Fund, a sign of the firm's high regard in France for investments in travel and tourism.Our key characteristic is our ability support companies in developing strategic thinking and to suggest best ways to implement those components, stated Bismuth, CEO at Montefiore, and former managing director at Boston Consulting Group.Bismuth stated that around 30% of firms' cumulative investments made since 2005 were in the travel industry.Montefiores most well-known exit from an investment in the travel sector was its sale of Auto Escape Group to Expedia Group in 2014. This European online car rental company is known as Auto Escape Group. Expedia did not disclose the purchase price and folded the group under its CarRentals.com name.European Camping Group is its largest holding. It also holds stakes in the tour agency Voyageurs du Monde and Cruiseline, the cruise travel distributor (previously known as QCNS Group) as well the online travel agency Misterfly.Montefiore is known for its long-term, strategic approach to investing.Bismuth stated that we have been able stimulate and sustain profitable growth within our portfolio companies. Over the past decade, the toplines of the businesses we invested in, not only the best, but all the companies across the sectors, have increased by 18 percent on average.However, the portfolio's travel companies had a tough 2020.Travel companies can be helped to strategize for growthPrivate equity has returned to the travel industry during the pandemic. It can learn from its past mistakes and use less leverage in today's deals. Montefior's light touch in its investments history is a good example.Bismuth stated that his team does not invest in distressed assets, but rather seeks out companies that have good models to apply the jet fuel of growth capital. His team's contribution to B&B Hotels' success, a French-based hotel company that he was an investment in, was something he was proud of. Its story shows the Montefiores private equity approach.Bismuth stated that B&B Hotels, an independent budget chain, had 45 properties in 2005. Montefiore and Eurazeo, a private equity firm, partnered up to purchase B&B Hotels from Parquest Capital & Duke Street Capital for 385million (approximately $460 millions).Eurazeo and Montefiore helped the chain reach 223 properties in 2010. Carlyle Group purchased an 80 percent stake at $645 million (480m) while Montefiore retained a 15% stake. The founders owned the remaining equity. Private equity firm PAI Partners purchased B&B Hotels from Carlyle Investment and Montefiore Investment in 2016. The transaction was worth $882 million (790 millions).B&B Hotels now boasts more than 620 hotels and approximately 55,000 rooms. It is the third largest French hotel chain after Accor Hotels and Louvre Hotels.Montefiore was a strategic minority shareholder and helped to reposition B&B Hotels to an econocic category. This helped to make the brand hipper, as well as move it to the upper end of the budget segment.Montefiore recognized that B&B Hotels could be quickly scaled through acquisition to reach critical mass and make international development financially profitable. This would allow the brand marketing investments to pay off and improve operational efficiency. Montefiore was able to see the company grow from $95 million (80M) in annual sales to $415 million (350M) annually over ten years.Similar investments were made in mid-sized players as well as scaling them up.Cruise Bet Goes South?Montefiore purchased an approximate 80 percent stake in Monaco's QCNS Cruise (now known as Cruiseline). Cruiseline distributes cruises online via its websites such as croisieres.fr and Cruceros.es. It also has a call center. Debtwire reported that the deal was worth approximately $80 million (70,000,000).Between 2017-2019, Cruiseline saw its turnover increase from 128 million euros to around $200 million (170million) per year at Montefiore.Bismuth stated that it went from being in the leading position in France to being in the number-one spot in France, Spain, Italy and other parts of South America.Montefiore, a private equity firm, announced that it had concluded a deal with Abnex to sell its stake in February 2020.Bismuth stated that we had previously signed a contract to buy the business pre-Covid. However, the buyers didn't show up. There is a court case.Be open to the possibility of consumer-focused travel businessesFrance-based travel companies have shown greater resilience than expected during the crisis. It is these mid-market, profit-oriented businesses that Montefiore has historically been most interested in.Montefiore invested a minority in MisterFly in 2017, an online travel agency. MisterFly distributes to consumers, businesses-to-business and through affiliate sales. It also offers a range of innovative products for France. Montefiore partnered with Vente Prive (a French retailer also owned by flash travel brand Voyage Prive) to invest $20 million in the company's rapid growth.MisterFly's 2017 sales were $110 million (100M) and in 2019 it will be about $600 million (500M) according to Bismuth.The European Camping Group is Montefiores largest direct investment into the travel industry. It offers high-end camping accommodations in France and Southern Europe to customers coming from the United Kingdom and France. Homair Vacances and Eurocamp are its main brands.The Group manages over 20,000 mobile homes on 300 European sites. It served more than 1,000,000 vacationers in the year prior to the pandemic.Montefiore Investment acquired a majority of the shares in 2006. It worked closely with the founder to transform the small French business into an European leader, increasing turnover and enterprise value by tenfold. Although the group was made public in 2007, Montefiore remained involved.Montefiore Investment was a strategic minority investor after a 2015 deal with Carlyle which saw the group taken private. Since then, the camping group has acquired companies like Eurocamp in the UK. It exploited synergies and invested regularly in campsites, quality accommodation, and the management structure. In 2019, the group made approximately $430 million (360 millions) in annual sales.Bismuth stated that the market is bigger than glamping. European Camping Group can be the Club Med of 30 years ago, transforming into a trusted, comfortable, and affordable vacation brand for families.
