Hotel buyouts a bonanza for many mutual funds

Hotel buyouts are proving a bonanza for mutual funds which snapped up Hilton, Marriott and other hotel stocks after the September 11, 2001, attacks.

Private-equity firm Blackstone Group’s (BX.N) $20 billion bid for Hilton Hotels Corp. (HLT.N) on Tuesday sparked a 27 percent rise in shares of the second-biggest U.S. hotel chain over Thursday and Friday, and boosted those of Hilton’s rivals.

But for funds that bought Hilton at its lows in 2001 and still own them, the gains are nearly 500 percent.

Bank of America Corp.’s (BAC.N) Columbia Real Estate Equity Fund is one such fund. According to data from Lipper, the fund bought 536,700 shares in the last quarter of 2001 and held 667,514 as of the last filing in April. Read more » »