Jan 30, 2024 - Business

Ski resort owner raises $3 billion to keep building, despite climate change

Illustration of a person skiing on a mountain made of money.

Illustration: Gabriella Turrisi/Axios

Eric Resnick isn't sweating the weather, even on the growing number of days when his ski resorts empire is unseasonably balmy.

Driving the news: KSL Partners, the $21 billion private equity firm that Resnick co-founded and leads, just raised a $3 billion continuation fund for Alterra Mountain Co., whose properties include Palisades at Tahoe (California), Steamboat (Colorado), and Sugarbush (Vermont).

In the weeds: Continuation funds let PE firms maintain a portfolio company investment for a longer period than it normally would, while giving limited partners the opportunity to either reinvest or exit.

  • In this case, KSL also welcomed in some new investors.
  • Proceeds will be used to continue building out existing properties, including hotels and villages, plus possible property acquisitions.

The big picture: Weather is more volatile than it was when KSL formed Alterra in 2017, let alone when Resnick was an executive with Vail Resorts in the 1990s.

  • But he argues that Alterra and others have managed to offset that new normal with more advanced snowmaking technologies and the introduction of multisite, season-long passes (Alterra's is called Ikon, and can be used at over 50 mountains).
  • "Climate change is obviously something we're focused on, including being responsible stewards within our own communities, but we've also learned to make do with a little less snow," Resnick says. "We're now able to make snow using less water, and at higher temperatures, and are able to move snow much more easily than we used to."
  • Companies like Alterra also have benefited from the closures of smaller, family-run ski resorts than can't afford expensive snowmaking equipment, although Resnick notes that those declines have slowed or even stopped.

The bottom line: Yes, Resnick is talking his book, and perhaps whistling a bit past the snowmelt.

  • But private equity firms don't tend to raise continuation funds for companies that they see as having dire futures, and there's certainly been a boom in mass-affluent experience travel, a category within which skiing certainly falls.
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