US / Chile: Property management technology company Andes STR and Santiago-based global investment firm WEG Capital have announced the closing of WEG-Andes Fund I, their inaugural real estate private equity fund.
With leverage, the fund plans to acquire $25 million in single-family properties beginning this month.
As the first its kind, the fund will act as a vehicle focused on helping investors gain exposure to a portfolio of short-term rental real estate properties for which Andes STR provides full turnkey services to source, market and manage the properties. The fund is also designed to enable the buying of properties in the Orlando area, a location with strong year-round demand and long-term fundamentals.
Sebastian Rivas, founder and CEO of Andes STR, said: “It is incredibly hard to invest in Airbnb-style short-term rental real estate at scale so we launched Andes STR to leverage cutting edge technology to help real estate investors enjoy the anticipated attractive returns that short-term rentals can provide. This fund demonstrates that investors want to invest in the asset class and find our turnkey solution, which leverages our award-winning technology, appealing.”
Guillermo Arriagada, partner at WEG Capital, said: “Ever since beginning discussions with Andes in Q3 2021, we have been excited about the STR investment opportunity that we could provide to our existing, sophisticated client base. We couldn’t be happier with Andes STR’s cutting-edge technology, risk-adjusted return profile, and ambitious and talented executive team.
“In this period of economic turmoil, our clients have expressed strong interest in these assets that provide an inflation hedge with attractive upside and strong downside protection,” he added.
Matias Duhart, co-founder and chief investment officer at Andes STR, said: “We are thrilled to partner with WEG on our first institutional fund and look forward to working with them long into the future. The WEG partnership was natural, given our mutual connections and ability to connect sophisticated international investors with short-term rental properties.
“They also loved our tech-driven approach, using machine learning to find properties that show potential to outperform the average investment,” he added.
It is anticipated that WEG-Andes Fund I will be deployed over the next year, with a projected investment time horizon of five years. Investors in WEG-Andes Fund I include sophisticated family offices and industry executives from North and South America, as well as the Andes STR founders and WEG Capital Partners.
DLA Piper LLP served as outside fund counsel.
Founded in 2021, Andes STR raised $1 million in seed funding in December to facilitate its expansion in Orlando. Its team has experience investing in and managing portfolios of short-term rentals since 2018 across the United States, Canada, and Chile.