KSL Capital Partners announced Monday the investment firm has closed on a single-asset continuation vehicle for Alterra Mountain Co., with total commitments of over $3 billion.

A continuation vehicle is described as a secondaries structure in which the general partners of a company transfer assets from a fund nearing the end of its life to a new fund. In turn, that can allow the general partners to reinvest in assets with growth potential, and give limited partners a chance to cash out on their investments.

An article published by the investment management firm Barings says continuation vehicles have historically been used to give portfolio companies more time to deliver on expected returns, but more recently have come into play so general partners can recapitalize the “crown jewels” in their portfolios to provide more exposure and additional capital for growth.

At the same time, a continuation vehicle can also give limited partners a chance to cash out or take an equivalent ownership interest in the new fund, or a combination of the two. Typically, general partners have management control over a business and an unlimited financial liability, while limited partners are not involved in the management decisions and their liability is limited to their investment.

According to KSL Partners, the final closing on its continuation vehicle underscores the company’s commitment to Alterra, while also allowing KSL to return capital to limited partners. The company also says the $3 billion of commitments in the continuation vehicle comes from both general partner and rollover investors.

“We are thrilled to reaffirm our long-term commitment to the business, and we are very grateful to our investors for supporting us in the formation of this new vehicle,” KSL CEO Eric Resnick said in a news release.

He added that the continuation vehicle gave KSL a chance to provide “a significant return of capital to those existing investors who desired liquidity,” while also bringing in new investors “who share (the company’s) excitement about the future of Alterra.”

“We look forward to continuing to work with Alterra in its next stage of growth,” he said.

KSL Capital Partners is a private equity firm that invests exclusively in the travel and leisure industry, buying up a wide array of hospitality, recreation, clubs, real estate and travel services assets — including beach resorts, luxury hotels, cruise lines and ski resorts.

The company described the investors in the continuation vehicle for Alterra as a diverse group of state and county pension funds, corporate pension funds, sovereign wealth funds, endowments, foundations and insurance companies.

Alterra was formed in July 2017 through a joint venture of affiliates of KSL Capital Partners and Henry Crown & Company, which owns Aspen Skiing Co. The formation of Alterra led to the combination of Intrawest Resorts, which included Steamboat and Winter Park resorts in Colorado, as well as Mammoth Resorts, Palisades Tahoe and Deer Valley Resort.

The Ikon Pass came along about a year later. Through ownership, partnerships and more purchases, Alterra takes pride in its Ikon Pass, offering skiers and riders access to more than 50 mountain destinations worldwide, as the company has made that one of its major selling points for the pass.

“What we believe makes Alterra special is that we endeavor to respect and accentuate the elements that make each of our mountain destinations unique,” Alterra CEO Jared Smith said in the news release. “Our passion for the places where we operate is only exceeded by the passion of our team members and our guests. We are extremely fortunate to have partners who share this passion and who recognize that their interests and the interests of our communities, team members and guests are inextricably linked.”

Other pieces of Alterra’s portfolio are Alpine Aerotech, a worldwide helicopter support and maintenance service center in British Columbia, Canada; Aspenware, a technology services and e-commerce; and Ski Butlers, a ski and snowboard rental delivery company.

This story is from Steamboat Pilot & Today.