The hospitality industry generates trillions in cash but remains structurally illiquid between refinancing events. Current investors face a stark choice: accept multi-year lockups in private equity or settle for public REITs with limited asset-level transparency.
HIUs bridge this gap by creating securitized, investor-grade claims on hotel cashflows with standardized risk metrics and optional liquidity. We're making hotel income comparable and tradable at institutional scale.
$2T+
Global Market
Multi-trillion dollar hospitality ecosystem
24-36
Months to Scale
Billions in diversified float
Two-Phase Execution Strategy
Phase I: Singapore VCC
Launch HIU sub-funds with engineered private liquidity through tenders and LP-led secondaries. Institutional governance with trustee-controlled waterfalls.
Phase II: Public Exchange
Graduate to broker-dealer sponsored ATS and public exchange marketplace. Expand investor access and capture market-making economics.
How HIUs Work
HIUs are senior, pass-through revenue interests issued by SPVs holding perfected interests in hospitality cashflows. Two primary variants serve different investor needs:
Asset HIUs
First-priority interests in 30-60% of property-level NOI after taxes and essential OpEx. Focused on stabilized, branded select-service properties.
Operator Performance Notes
Pass-through interests in management and franchise fees with step-down protections tied to performance thresholds.
Quantamental Framework
Our proprietary metrics are embedded in pricing, protections, and disclosures, creating transparent risk-adjusted returns:
AHA (Adjusted Hospitality Alpha)
Deal IRR minus hospitality benchmark minus calibrated Illiquidity Premium based on public REIT spreads.
BAS (Bay Adjusted Sharpe)
Efficiency measure: AHA divided by modeled cashflow volatility adjusted for brand and market dispersion.
Blends sovereign spreads, FX volatility, tourism flows, and political risk. Triggers mandatory hedging above thresholds.
Phase I: Singapore VCC Platform
Governance Structure
VCC Board & Investment Manager for oversight
Trustee controls collections and reserves
Multi-bank FX execution and custody
Transfer agent for tenders and secondaries
Liquidity Engineering
Quarterly tender offers of 5-10% NAV, LP-led secondaries, and multi-class share structures align investor preferences with asset cycles.
5-10%
Tender Offers
Quarterly NAV liquidity
5-7
Term Years
With call and put features
Financial Projections & Economics
Bay Street earns management fees (1.00-1.50% of NAV), performance fees (10-15% over 7-8% hurdle), and structuring fees (0.50-0.75% of RPN PV). Operating leverage drives margin expansion as AUM scales.
Implementation Costs & Timeline
1
Months 0-3: Foundation
Constitute sub-funds, finalize PPMs, hire admin/trustee. One-time formation: $1.8-2.8M
Close first RPNs, establish distributions. Annual OpEx: $6.2-7.5M steady state
4
Years 2-3: Scale
ATS filing, continuous trading, $1.5-2.0B float with 40-60% EBITDA margins
Risk Management & Mitigations
Regulatory Risk
Progress private placements while preparing ATS filings. KPI: <2 regulator RFI cycles per filing.
Adoption Risk
Anchor programs and guaranteed market-making. KPI: ADV/float ≥0.20% by Month 18.
Seasonality Risk
RMS-calibrated reserves and deferral modes. KPI: distribution coverage ≥1.20×.
Operational Risk
SOC2 Type II, tested disaster recovery. KPI: RTO ≤2h, RPO ≤15m.
Bay Score triggers provide automatic protections: scores <65 open investor put windows, while BMRI >60 enforces mandatory hedging.
Investment Opportunity
The HIU Advantage
HIUs represent the first standardized, risk-scored pathway to hotel income with institutional governance and engineered liquidity. Our quantamental framework transforms opaque real estate cashflows into transparent, tradable securities.
Phase I delivers immediate market entry through Singapore VCC with proven private liquidity mechanisms. Phase II scales to public exchange, capturing market infrastructure economics while broadening investor access.