On Tuesday, global real estate and private equity investor CGI Merchant Group announced that it has entered a multimillion-dollar investment partnership with three-time Major League Baseball MVP Alex Rodriguez (A-Rod), and his partner, the founder of real estate private equity and debt financing firm Maverick CP, Adi Chugh. The pair is among the “starting lineup of high-profile and institutional investors” backing CGI’s forthcoming $650 million Hospitality Opportunity Fund (H-Fund).
A-Rod Corp and Maverick CP partnered earlier this year to expand their respective portfolios and build a large commercial real estate platform across various asset classes. Under the new agreement, Rodriguez and Chugh will support CGI’s investment strategies, expanding the firm’s debt capital markets capabilities, and assisting in the acquisition of upcoming “trophy investments” for the H-Fund.
Under the CGI venture, A-Rod and Chugh will also take an active role in advancing the firm’s co-investment platform and expanding its flexible and multi-use office portfolio.
H-Fund
The H-Fund will focus on acquiring and developing hotel properties throughout North American and Caribbean markets, targeting more than 20 hotels over the next three years. H-Fund assets will be hand-selected and repositioned to form a first-of-its-kind hospitality portfolio. The assets will be housed within the Hilton portfolio of brands, adding to Hilton’s portfolio of more than 6,300 properties in 118 countries and territories worldwide.
“Continuing to earn the trust and partnership from sophisticated investors, such as Alex Rodriguez and Adi Chugh, is a testimony to our track record and contrarian approach. Their support will be crucial as we execute on key strategic initiatives for the firm,” said CGI Founder and CEO Raoul Thomas. “Alex and Adi will not only increase the depth of our business relationships but also broaden the social impact of our investments, which we hope will spur a more conscious approach to investing across the entire commercial real estate industry.”
“CGI’s visionary and conscious approach to business has the potential to transform the commercial real estate industry, bringing in untapped voices that can inject new energy and ideas to ignite vast opportunities,” said Rodriguez. “I’m proud to be involved with a company that is as focused on advancing the communities it calls home, as it is on financial returns.”
Founded in 2006, CGI Merchant Group currently holds assets across multiple alternative investment strategies, including value-add and opportunistic funds. These strategies have consistently delivered double-digit returns since inception, and in the process, allowed CGI to be prepared to execute in all economic cycles—“such as the current one”—that has heavily influenced its soon-to-be-announced hospitality concept.
“Simply put, CGI is an industry disrupter. As other commercial real estate funds are shedding assets, CGI is gaining ground, all while changing the definition of thoughtful investing,” said Chugh. “I am looking forward to working alongside CGI to blaze a new path of innovation in real estate investing.”
The A-Rod Empire
Rodriguez’s Miami-based investment firm, A-Rod Corp, has internal and external capital invested across more than 30 companies and partnerships valued at more than $1 billion.
Real estate assets developed through A-Rod Corp subsidiaries and investment partners exceed 15 million square feet of space, and include multi-family residential developers Monument Capital Management and Newport Property Construction (both of which Rodriguez founded), and Petros PACE Finance, which provides financing (i.e. Commercial Property Assessed Clean Energy) for costs associated with renewable energy development in commercial real estate, or C-PACE.
Earlier this year, Alex Rodriguez, together with co-investing fiancee Jennifer Lopez, fell short in his bid to buy Major League Baseball’s New York Mets—the Big Apple rival to A-Rod’s Yankees—losing out to billionaire hedge fund manager Steve Cohen of SAC Capital. Speaking at a virtual sports business event earlier this month, Rodriguez told an industry panel that his interest in the Mets was primarily motivated by its intellectual property value, saying “…We thought baseball was just a small part of it.”
