Category: Core Return Modeling
Definition: Present value of projected cash flows minus initial investment.
Detailed Explanation: NPV calculates the value today of future hotel cash flows discounted at a required rate of return. In Bay Street’s pipeline it is the first-pass viability screen. Positive NPV means value creation; negative NPV means rejection.
Internal Links: IRR, Bay Score
External References: Investopedia NPV guide; Bay Street Quantamental Investment Process
Category: Core Return Modeling
Definition: The discount rate at which NPV = 0.
Detailed Explanation: IRR standardizes returns across deals with different time horizons. In Bay Street’s process it follows NPV and provides a comparable baseline before hospitality adjustments.
Internal Links: NPV, AHA, Bay Score
External References: CFA Institute IRR definition; Bay Street Quantamental Investment Process
Category: Hospitality-Specific Return Adjustment
Definition: IRR minus benchmark minus illiquidity premium.
Detailed Explanation: AHA strips out inflated IRR by accounting for illiquidity and benchmarking against the Bay Street Hospitality Index (BSHI). It measures true excess performance above sector norms.
Internal Links: IRR, BAS, Bay Score, IP
External References: Bay Street Lifecycle Methodology
Category: Hospitality-Specific Return Adjustment
Definition: AHA divided by volatility.
Detailed Explanation: BAS measures return efficiency per unit of risk. High AHA only matters if delivered efficiently, making BAS critical for risk-adjusted comparability across operators and markets.
Internal Links: AHA, LSD, Bay Score
External References: Bay Street Risk-Adjusted Return Engineering
Category: Downside & Liquidity Filters
Definition: Quantifies liquidity drag from FX, capex, and lockup frictions.
Detailed Explanation: LSD models exit risk by stress-testing timing, foreign exchange, and capital expenditures. High LSD penalizes Bay Score and may trigger exit clauses in term sheets.
Internal Links: BAS, BMRI, Bay Score
External References: Bay Street Dynamic Negotiation Playbook
Category: Downside & Liquidity Filters
Definition: Composite index of country-level macro risk.
Detailed Explanation: BMRI integrates sovereign spread, FX volatility, tourism growth deltas, political risk, and repatriation restrictions into a 0–100 score. Used to discount IRR projections and adjust Bay Score for macro fragility.
Internal Links: LSD, Bay Score
External References: Bay Street Macro Risk Overlays
Category: Downside & Liquidity Filters
Definition: Adjustment for private vs public market liquidity gaps.
Detailed Explanation: IP is engineered, not assumed: it compares private deal IRRs with public REIT yields, adjusting for volatility and dispersion. Integrated into AHA and Bay Score to prevent overvaluation.
Internal Links: AHA, Bay Score
External References: Bay Street Illiquidity Premium Whitepaper
Category: Unified Scoring & Decision Gate
Definition: Composite 0–100 score integrating all metrics.
Detailed Explanation: Bay Score is Bay Street’s unifying decision metric. It combines AHA, BAS, LSD, BMRI, IP, ESG, and sponsor quality into one comparable output. Deals scoring ≥70 typically proceed to Investment Committee.
Internal Links: NPV, IRR, AHA, BAS, LSD, BMRI, IP, IC Decision
External References: Bay Street Quantamental Investment Process
Category: Governance
Definition: Final governance gate for deal approval.
Detailed Explanation: IC Decision is triggered by Bay Score thresholds and macro-risk overlays. It represents the final investment governance step, where institutional review aligns with quantamental scoring outputs.
Internal Links: Bay Score, LSD, BMRI
External References: Bay Street Quantamental Execution Blueprint
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Bay Street Hospitality is a diversified hotel fund series for allocators seeking quant-driven exposure across top countries, operators, and hotel tiers. The fund targets a diversified portfolio in both high-growth emerging markets and stable developed markets, optimizing risk-adjusted returns. The leadership provides structured equity and pivotal strategic guidance to hotel-related investments. The fund establishes joint ventures with best-in-class partners, focusing on deal flexibility, currency considerations, tax efficiency, and clear exit strategies.
