SAUDI Arabia’s PIF sovereign wealth fund will buy a 49 per cent stake in luxury hotel group Rocco Forte Hotels and help to support its expansion, the owner of Britain’s Balmoral hotel said on Monday (Dec 4).

PIF’s purchase gives the hotel group an enterprise value of around £1.4 billion (S$2.4 billion), one source close to the matter said on Monday, confirming a report in the Financial Times.

Founders Rocco Forte and his sister Olga Polizzi will remain as executive chairman and deputy chair, respectively, it said, adding that the Forte family would retain majority ownership and control of the group, which currently has 14 hotels.

“PIF is an excellent partner for us going forward... They share the same vision for the brand and the future strategy of the group with the same ambition to take a long-term view,” chairman Forte, 78, said in a statement.

A spokesperson for Rocco Forte Hotels declined to confirm the size of PIF’s stake.

Rocco Forte Hotels, founded in 1996, operates across Italy, Britain, Germany, Belgium and Russia and has 20 private villas in addition to its hotels. Another three hotels are expected to open in the next two years in Italy – two in Milan and one in Sardinia.

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Italian investor CDPE Investimenti will sell its entire shareholding as part of the deal. CDPE, which owned a 23 per cent stake in Rocco Forte Hotels, is owned by Italy’s state-backed fund CDP. It invested 80 million euros in the hotel group in 2015.

Saudi Arabia is investing in a broad range of sectors as part of its Vision 2030 plan that aims to wean the country off its dependence on oil.

“Our investment in Rocco Forte Hotels reflects PIF’s confidence in both the commercial opportunity and strength of the international hospitality and tourism industries,” Public Investment Fund’s Turqi Al Nowaiser said in a statement.

PIF did not immediately respond to a Reuters’ request for more details on the deal.

Rocco Forte, which was advised by Rothschild, reported revenues of around £300 million last fiscal year, with a core profit of around £60 million, according to a source.

Forte, a Briton with Italian roots, launched the hotels group after the company his father founded was taken over in 1996 by British media and leisure group Granada after a high-profile takeover battle. REUTERS