Generator hostels group secures €750m refinance

The Times

The upmarket hostel operator Generator Group, owned by Queensgate Investments, has defied tough financial markets to complete a €750 million global refinancing.

The London-based investment firm has opted to continue holding the business and to accelerate expansion after it quadrupled profits in the six years since acquiring it.

The refinancing, involving 13 jurisdictions, included European debt facilities, private bonds and US debt facilities. It was backed by Ares Management in Europe and Generator’s existing US lenders, Waterfall Asset Management and Värde Partners.

Queensgate bought the chain, then consisting of 12 properties, in 2017 from Patron Capital for €450 million and it is now up to 21 hostels with 12,000 beds in ten countries and delivering profits “significantly above” pre-Covid levels.

Generator, which has properties in cities across Europe and the US, recently reported record revenues of €225 million, up from €180 million in 2019, with underlying earnings rising from €50 million to €75 million. Jason Kow, chief executive of Queensgate, said Generator’s performance since the pandemic had enabled it to refinance in a challenging market, adding: “We’re holding the assets because they are continuing to deliver significantly for us, both in terms of earnings and capital values.”