“Scarcity is the only moat left. You can always build another tower. You cannot build another clifftop,” Brown said, pointing to deals like the record-breaking valuation of the Inn at Little Washington expansion and the ongoing equity raise for One&Only Hudson Valley.
From Bay Street’s vantage point, this is a textbook example of what our Modular Moats framework describes as a scarcity-driven moat — assets where regulatory, geographic, and cultural barriers prevent replication . When such assets are run through the Bay Score funnel — from raw IRR to liquidity stress, macro overlays, and illiquidity premiums — they consistently show lower volatility and higher resilience than their size would suggest.
The challenge, however, is matching investment horizon to asset DNA. Family offices can hold indefinitely, while institutional LPs face IRR clocks and exit windows. As Brown notes, the experiment will only work if institutions adopt 8–12 year+ horizons, effectively mimicking family behavior. Otherwise, bidding up multiples without matching stewardship discipline risks eroding the very moat they covet.
In recent Bay Street meetings with prominent art families in Europe and Asia, a consistent theme has emerged: willingness to license cultural assets only to operators who understand preservation as well as monetization. As Art Collecting Today reminds us, “ownership confers responsibility to safeguard value beyond price.” Likewise, Management of Art Galleries stresses that “curation without context diminishes both legacy and yield.”
These insights are directly transferable to ultraluxury hospitality. Institutions tempted to “financialize” scarce assets must instead embrace the cultural alpha embedded in them — working with the “artist-operators” (Brown’s Picassos) who created and sustained them. Co-investment models where operators keep a meaningful stake, akin to an artist retaining control of a body of work, can balance liquidity needs with continuity of vision.
For LPs, the Bay Street Quantamental framework highlights two diverging paths:
The lesson is clear: in ultraluxury, scarcity is not to be “pimped out,” as Brown bluntly puts it, but to be curated, preserved, and leveraged. Institutions entering this space must learn from family offices and from the art world itself — that true returns lie not in scale, but in stewardship.
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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.
