SAM Magazine—Denver, Feb. 2, 2024—KSL Capital Partners (KSL) closed a "single-asset continuation vehicle" for Alterra Mountain Company in late January, with total commitments of more than $3 billion, KSL said in a press release. What it didn't say, and what many in the industry are speculating about, is what this all means.

Let's start with what we know: Alterra is jointly owned by KSL and an affiliate of Henry Crown & Company, which also owns Aspen Snowmass independently from Alterra.

Investors in the continuation vehicle include state and county pension funds, corporate pension funds, sovereign wealth funds, endowments, foundations, and insurance companies. It's also likely that some of the original investors increased their investment. In any case, the investments demonstrate strong faith in and commitment to Alterra.

To some extent, the continuation vehicle allows KSL to return capital to its limited partners. And it allows KSL to raise funds that could be used for a variety of purposes. KSL is not required to detail any of this, and it hasn't, beyond the general statement that follows.

"This transaction allowed us to provide a significant return of capital to those existing investors who desired liquidity, while welcoming a new set of investors who share our excitement about the future of Alterra. We look forward to continuing to work with Alterra in its next stage of growth," said Eric Resnick, CEO of KSL.

So, what might KSL and Alterra do with whatever portion of the $3 billion is available for capital investments and acquisitions? KSL told SAM it could not comment beyond the press release. But that hasn't stopped others in the industry from speculating on what could be behind the move.

First off, most believe that a significant portion of that $3 billion (or more, the press release headline suggested the total figure was greater than $3 billion) is available cash that Alterra can invest as it wishes.

Much of the immediate speculation centers on capital investments. Alterra is involved in a major expansion project at Deer Valley, Utah, and recently completed large projects at destination resorts Steamboat and Winter Park, Colo. The cash infusion could make these investments easier to swallow and reduce Alterra's debt.

The juiciest speculation concerns possible acquisitions. The most-mentioned targets include the usual multi-area suspects, from POWDR to Sun Valley/Snowbasin. As one source said, "there are not many big targets out there."

What most everyone agrees on is that the continuation vehicle gives Alterra tremendous flexibility to do whatever it wants. It could invest in existing properties and also make acquisitions. "My instincts are Alterra sees opportunity both in their existing resorts and additional acquisitions," another source said.

Beyond that, we'll just have to wait and see.