Alchemy Partners and ASHG: inside a special-situations hotel investor

Analysis by Roberto Necci for Investimenti Alberghieri

The thesis is straightforward: Alchemy Partners is not an occasional hotel investor. It does not enter hospitality as a tactical diversification play or as a one-off real estate bet. It applies a repeatable special-situations approach to hotels: acquire assets or platforms with a solvable problem, inject capital, regain operational control, reposition the product and convert hidden potential into value.

Alchemy’s investment in the British spa resort group Barons Eden in March 2025 was described by the advisors involved as the firm’s tenth investment in European hospitality over 14 years through its Special Opportunities Funds. That is more than a transaction note. It confirms that, for Alchemy, hospitality is not a side theme. It is a recurring investment vertical.

Today, this exposure runs on two parallel tracks. The first is Alchemy Step Hotel Group, or ASHG, a dedicated European hotel investment platform. The second is a series of direct investments in UK hospitality operators, with a consolidation and buy-and-build rationale.

The model deserves close attention because it shows how institutional capital looks at mid-market hotels: not as secondary assets by definition, but as operationally complex assets where value can be created through capital, branding, management and execution.

For Italy, this is not an abstract case study. It speaks directly to a large part of the national hotel stock: independent 3- and 4-star properties, often family-owned, sometimes under-managed, frequently constrained by leases, fragmented ownership or legacy debt, but still located in markets with real demand.

Who Alchemy Partners is

Founded in London in 1997, Alchemy Partners is a private equity and special-situations investment manager focused on distressed, undervalued or operationally challenged businesses, mainly in Europe. Its strategy spans both debt and equity, with a clear preference for complex situations: fragile capital structures, underperforming operating platforms, assets with deferred investment needs and companies whose value is not fully reflected in current performance.

The firm’s stated track record exceeds £4-5 billion invested across more than 200 transactions since inception. Its latest vehicle, Alchemy Special Opportunities Fund V, raised approximately €1 billion in commitments, exceeding its original target.

This is the context in which hotels become attractive.

Not the flawless, stabilized, fully priced hotel. But the hotel with a correctable issue: weak management, outdated positioning, insufficient branding, deferred capex, a complex ownership structure or debt that limits its ability to invest.

For a special-situations investor, the problem is not a reason to walk away. It is the entry point.

The ASHG model: capital plus a captive operator

Between 2021 and 2022, Alchemy established a dedicated hotel investment platform with the German operator Step Partners: Alchemy Step Hotel Group, based in Frankfurt.

ASHG was launched with €250 million of committed equity. The critical point is not only the size of the capital pool, but its structure. The platform does not rely on bank debt to execute acquisitions. In a hotel market where many transactions stall because of financing timelines, valuation gaps, lender caution or covenant issues, the ability to close quickly with committed equity becomes a major competitive advantage.

The platform’s published investment criteria are especially useful for anyone involved in hotel sales, acquisitions or restructuring.

Size. Individual hotels with more than 90 rooms, preferably in the 90-250 room range, and portfolios in the 2- to 4-star segment.

Geography. Germany and neighboring countries, with a focus on secondary cities, regional markets and destinations with a mix of business and leisure demand.

Ticket size. Transactions typically between €10 million and €50 million, with openness to larger deals where the investment case is compelling.

Structure. Freehold assets or senior secured loans, including loan-to-own opportunities. Preference for assets free from restrictive operating structures, or with lease or management agreements close to expiry.

Value creation. Repositioning, refurbishment, conversion to international brands, operational turnaround and institutional-grade reporting.

The structure is simple but powerful: capital plus operator.

Alchemy brings financial capacity, investment discipline and special-situations expertise. Step Partners brings hotel management, operational control and execution capability. Asset ownership and hotel operations remain distinct, but they are coordinated within a single value-creation plan.

This is what makes ASHG more than a hotel buyer. It is a platform designed to turn fragmented, under-optimized hotel assets into institutional products.

For anyone working on hotel management agreements, franchise structures, hotel acquisitions or distressed hospitality assets, ASHG is a textbook case. It shows that value is not created by buying the walls alone. Value is created by acting simultaneously on product, brand, operations, cost structure, distribution, capex and positioning.

What ASHG really buys

ASHG does not buy the “perfect” hotel. It buys the improvable hotel.

The typical target is a mid-sized property, often in a secondary city, with real demand but performance below potential. It may be an independent hotel, an under-branded asset, a property with deferred capex, a hotel constrained by outdated management or a senior loan secured by an underlying hospitality asset.

The point is not trophy visibility. The point is the gap between current value and potential value.

In this strategy, the international brand is not cosmetic. It is a value-creation instrument. Conversion under Marriott, Accor or IHG flags can improve recognition, distribution, operating standards, commercial reach and exit liquidity.

But the brand alone does not create the turnaround. The real work is operational: rooms, product, pricing, revenue management, distribution channels, cost control, maintenance, staffing, capex and performance reporting.

This is where the “capital plus captive operator” model becomes stronger than a purely financial approach. The investor is not waiting passively for market appreciation. It is actively changing the asset.

The portfolio: 14 hotels, two markets

The historical core of ASHG is in Germany. Between 2021 and 2023, the platform acquired five hotels and converted them under Marriott brands, including Courtyard, Moxy and Tribute Portfolio. Refurbishment works were completed during 2023-2024, transforming regional assets into products more legible to international demand.

In the fourth quarter of 2024, ASHG entered Belgium through two separate transactions. The first was the acquisition of the FLI Group portfolio, comprising eight hotels, acquired from Hamilton Hotel Partners with JLL advising the seller. The second was the separate acquisition of the Gresham Belson Hotel in Brussels.

ASHG portfolio — summary updated to June 2026

Market	Properties	Approx. rooms	Main brands
Germany	5	680	Marriott: Courtyard, Moxy, Tribute
Belgium	9	1,200	IHG, Accor, Marriott, independents
Total	14	approx. 1,880	—

The Belgian portfolio is particularly interesting because it is still in the value-creation phase. Several properties are being repositioned or rebranded toward soft brands such as Accor’s Handwritten Collection and Marriott’s Tribute Portfolio.

That detail matters. ASHG did not simply acquire a stabilized income-producing portfolio. It acquired a platform with operational upside.

A stabilized portfolio is valued mainly on current cash flow. A transformation platform is valued on the ability to change that cash flow.

Barons Eden and Buzzworks: the other hospitality track

Alongside ASHG, Alchemy also invests directly in UK hospitality operators. Here the starting point is different. The asset is not necessarily hotel real estate. It may be an operating platform with consolidation potential.

In March 2025, Alchemy acquired a stake in Barons Eden, the group behind Hoar Cross Hall in Staffordshire and Eden Hall in Nottinghamshire, two of Europe’s largest spa resorts. The investment thesis is to consolidate and professionalize a fragmented hotel and spa market.

A few months later came the financing of the management buyout of Buzzworks Holdings, a Scottish hospitality and restaurant group with 22 venues and turnover close to £37 million. The stated ambition is to exceed £100 million in revenue, including through expansion into the “venues with rooms” format: food, beverage and entertainment venues that progressively integrate rooms and accommodation.

Here, the hotel is not the starting asset. It is the next layer of monetization for an already scalable hospitality platform.

The pattern, however, is consistent: find an asset or operator with unexpressed potential, apply patient capital, professionalize management, scale the platform and increase value through structure, product, brand and operational control.

The lesson for the Italian hotel market

Based on publicly available information, Alchemy has no confirmed direct hotel acquisitions in Italy. Its verified hospitality perimeter remains Germany, Belgium and the United Kingdom.

Yet the ASHG model is highly relevant for Italy, because its target profile overlaps with a large portion of the Italian hotel stock: 3- and 4-star hotels, mid-sized properties, independent ownership, secondary cities and destinations with mixed business and leisure demand.

These are rarely trophy assets. But they can become attractive institutional products if viewed through an industrial lens: targeted capex, brand conversion, revenue management, improved operations, professional reporting and a credible repositioning plan.

In Italy, however, execution is more difficult.

The first issue is the hotel use restriction. In many cases, the property must remain dedicated to hotel use, which limits alternative exit options and reduces flexibility for investors.

The second issue is the widespread use of the hotel business lease, a structure that often separates real estate ownership from hotel operations. The property may belong to one party, while the hotel business is operated by another under a long-term lease. For an investor that needs control over the turnaround, this can be a major obstacle.

The third issue is the scarcity of assets available in vacant possession, meaning properties free from binding operating structures and capable of being immediately repositioned.

This is where transaction structuring becomes decisive. A hotel deal is not just a real estate transaction. It is a combination of property, business, contracts, capex, operating performance, brand potential, debt structure and exit strategy.

Without control over these variables, the investment thesis remains theoretical.

Loan-to-own and hotel NPLs: the real point of contact

One of the most relevant features of the ASHG model for Italy is its openness to senior secured loans.

This introduces a loan-to-own logic: the investor can enter not by acquiring the hotel directly, but by purchasing or financing the debt secured by the asset, with the possibility of later gaining control of the property or the underlying platform.

For Italy, this is particularly important. Many hotel assets are illiquid, fragmented or affected by legacy banking situations. In these cases, hotel NPLs are not only a financial problem. They can become a route into assets that would never reach the ordinary market in a clean and executable form.

But loan-to-own is not a standard acquisition strategy. It requires a different skill set.

The investor must understand the debt position, collateral package, enforcement timing, business continuity, operating structure, existing contracts, capex needs, potential brand strategy and post-restructuring value.

It is complex terrain. But complexity is exactly where a special-situations investor is supposed to generate return.

Why secondary assets are not necessarily secondary

The most important message of the Alchemy-ASHG case is cultural before it is financial.

The Italian hotel market often divides assets into two broad categories. On one side are iconic trophy hotels in major cities or luxury destinations. On the other is everything else, often dismissed as secondary product.

That distinction is too simplistic.

A mid-sized hotel in a secondary city can be an attractive investment if it has real demand, an improvable product, a manageable contractual structure and room for repositioning. It is not a weaker version of a trophy asset. It is a different investment thesis.

In a country like Italy, where much of the hotel stock is independent, family-owned and under-institutionalized, this perspective is especially important.

Value does not come only from location. It comes from the interaction between real estate, operations, brand, contracts, capex, distribution and execution capability.

Italy’s problem is not the absence of hotel assets. It is the difficulty of making those assets investable.

In summary

Alchemy Partners shows that mid-sized hotels in secondary cities are not necessarily a second-tier segment. They can form a distinct investment category with a clear industrial thesis: acquire a complex situation, solve the operational or financial problem, reposition the asset and bring it within institutional parameters.

ASHG is the clearest expression of this approach: committed capital, a captive operator, international brands, operational turnaround and private equity discipline.

For Italy, the case is both an opportunity and an execution challenge.

The opportunity is clear. Italy has a large stock of independent 3- and 4-star hotels, mid-sized properties, family-owned assets and products that could benefit from capital, branding and professional management.

The challenge is just as clear. Hotel use restrictions, business leases, long-term contracts, fragmented ownership and complex debt situations make execution harder than in more liquid markets.

If an investor with this profile were to enter Italy, the most likely structure would not be the acquisition of a perfect hotel. It would look much closer to ASHG: foreign capital, a specialized operator, assets to reposition, possible entry through credit and progressive conversion toward international standards.

In other words: do not buy the perfect hotel. Buy the right problem. And know how to solve it.

We will continue to follow the moves of Alchemy Partners and the ASHG platform through the Investimenti Alberghieri Observatory.

Do you own, manage or invest in a hotel that needs to be repositioned, valued or made more investable?

The ASHG model is built around one precise capability: turning a hotel with unexpressed potential into a more profitable, more legible and more attractive asset for the market.

If you are an owner, investor or operator and want to understand how to improve the value, management, positioning and profitability of your hotel, Hotel Management Group supports owners and investors across three key areas:

• asset valuation and potential analysis;

• commercial and operational repositioning plans;

• management, turnaround and value creation for hospitality assets.

Contact Roberto Necci → r.necci@robertonecci.it 

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