Golf businesses provide an asset-backed opportunity with strong levels of asset security. They are typically valued using an EBITDA (Earnings before interest, taxes, depreciation, and amortisation) multiple.
Throughout the duration of a golf business’s life cycle, we will actively manage the asset, seeking to enhance profitability (i.e. EBITDA) and ultimately achieve a strong uplift in value on disposal.
Strategy
We seek to acquire under-performing, under-valued businesses that offer significant opportunity to improve trading revenues, generate strong cash yields, and consequently significantly enhance capital value. Our golf acquisitions will often also encompass accommodation included on the freehold land that is purchased. We seek to acquire our golf businesses off-market through our partner’s network, with a view to selling them on the market at enhanced values once we have achieved our objectives.
We actively manage our golf businesses. This includes refurbishing the asset, improving the management team, streamlining trading efficiencies, and enhancing revenues. We seek to diversify the idiosyncratic risk associated with traditional golf clubs (most notably, seasonal risk and a narrow customer base) by developing new revenue streams and implementing new technologies that enable the business to be more efficient and to generate revenue all year round. In enhancing the business, we also seek to capture to a much wider audience, and we engage with customer bases that have historically been neglected by traditional golf clubs (such as, females and families).
Whilst surplus profits will be distributed to investors regularly, an investor’s ultimate return will be crystallised upon disposal of the asset. Our golf investments are medium-term investments and exit will be considered from year 5 onwards. By this stage, we seek to be in a position whereby we can dispose of the asset on the market at enhanced values, having achieved our objectives.
By acquiring businesses in strategic locations with accommodation, we are able also to pursue a wider strategy that includes establishing prominent destinations for UK golf tours. This could lead to marriage value between assets and subsequent shifts in EBITDA multiples.
Security
Security is provided by ownership of the freehold land that underpins the asset. For each of our golf investments, the partnership will acquire the freehold interest.
Example Investment: Bramshaw Golf Club, Brook, Lyndhurst.
Acquired August 2021.
Project Spotlight
Bramshaw Golf Club
Where: Situated in the village of Brook in Lyndhurst, which is in the heart of the historic New Forest National Park.
Background: Bramshaw includes two golf courses, the Manor Course and the Forest Course. Each course provides a distinct offering for members.
Bramshaw also includes a clubhouse, a practice ground, a golf shop and a green keeper’s buildings and storage yard.
The Manor Course and the Forest Course have car parks with 137 spaces and 50 spaces respectively.
Investment Strategy: Golf investments qualify for Business Relief after two years and provide a mix of capital growth and regular income streams.
There is ample opportunity to improve the performance of the business. Bramshaw’s food and beverage service was outsourced and the golf shop was also managed by the golf professional.
By bringing the management of these services in-house, there is an opportunity to increase revenues at Bramshaw immediately.
The wider strategy is to establish The New Forest Golf Group as the prominent location for golf in the New Forest area with Bramshaw
alongside The Bell Inn and Paultons Golf Club jointly being the leading destination for golf tour holidays in the New Forest Area and the South of England.
Owning a hotel and three 18-hole courses, an academy course and a floodlit driving range provides a very strong offering to the UK Golf Tour marketplace.
Photo: Bramshaw Golf Club
Golf investments are accessible through the following services:
Stellar Growth IHT Service
This discretionary managed service involves the creation of a privately owned limited company for each investor, to access a portfolio of asset-backed Investment Sectors – targeting 5% growth per annum.
Stellar ITS
A discretionary managed service designed for investors who wish to leave a legacy that is free from inheritance tax.