The Canadian based equity destination club Luxus, is currently looking for investors in its second and third funds, but plans to take a break from adding additional lifestyle funds, once these two are sold out.

The first Luxus fund, named "The Premiere I Collection", opened to investors in 2007 and targeted vacation homes valued at around $1m. This fund grew to over 200 investors who collectively own over 30 homes and was closed to new investors in 2013. The second fund, "The Elite Collection", targets homes in the $2m-$3.5m range and was launched in 2012. The third fund, Premiere II, is back to targeting homes around $1m and was launched in 2014.

Luxus home

Stephen Petasky President and founder of Luxus Vacation Properties, talked about his decision to halt adding more funds to the family, saying "While there may be ample opportunity to grow, we want to maintain great relationships and know all of our Partners."

Stephen went on to add four specific reasons:

  1. We feel we have achieved the economies of scale and right size to provide the highest level of service at the lowest effective cost to our Partners.
  2. We want to focus on being 'better vs bigger' for our Partners.
  3. We will be capping out at about a total of 50 properties and over $100 million in real estate over 3 funds. Being that our investor base is geographically focused in Western Canada, we feel we have the right balance of residences for our group.
  4. With real estate prices rising and our full-equity model, we feel we have timed the market right and achieved the goal of buying the majority of our real estate while the market was at its lowest (between 2009 and 2014).

At the current rate of growth for the two open funds, he is expecting the Elite fund to be fully subscribed in a few months and the Premiere II fund to be closed sometime in early 2016. The two most recent home additions were in Punta Cana Resort & Club in the Dominican Republic (pictured below).

Luxus Punta Cana

The Premiere I fund will reach maturity in 2018, when Luxus will create an opportunity that will allow investors to either exit the Partnership, or to carry-on with their ownership and keep travelling. Their goal is to maintain a 90%-plus retention rate of their ownership base, hence part of the reasoning to focus exclusively on making the service offering the best that it can be, versus focusing primarily on growth.

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