Lone Star Funds

Last updated
Lone Star Global Acquisitions, Ltd.
Company type Private
Industry Private equity
Founded1995;29 years ago (1995)
Founder John Grayken
Headquarters Dallas, Texas, United States
Key people
Products Private equity, real estate, credit
AUM $95 billion (2024)
Website www.lonestarfunds.com

Lone Star Funds, legal name of main entity Lone Star Global Acquisitions, Ltd. is a global private equity firm that invests in corporate equity, real estate, credit, and other financial assets. [1] The founder of Lone Star established its first fund in 1995 (under a different name) and Lone Star has to date organized 25 private equity funds with total capital commitments since inception of over $95 billion (as of 2024). [2] [3] [4] Lone Star's investors include corporate and public pension funds, sovereign wealth funds, university endowments, foundations, fund of funds and high-net-worth individuals. [5] Lone Star Funds has affiliate offices in North America, Europe and Japan. [6]

Contents

Hudson Advisors LP, an approximately 900-person global asset management company owned and controlled by the founder of Lone Star, performs due diligence and analysis, asset management and related services for Lone Star Funds. [7] In this capacity, Hudson Advisors LP has managed in excess of $260 billion of assets for Lone Star Funds since inception. [8]

History

Lone Star was founded by John Grayken. [9] From 1993 to 1995, Mr. Grayken was chairman and CEO of Brazos Partners L.P., a joint venture between the Robert M. Bass Group and the Federal Deposit Insurance Corporation, [10] that resolved approximately 1,300 “bad bank” assets resulting from the U.S. savings and loan crisis in the early ‘90s. [11] During this period, Brazos Advisors LLC was formed to provide asset-management and related services to Brazos Partners.

Following Brazos Partners, Grayken organized institutional capital to continue investing in distressed assets, closing Brazos Fund, L.P. in 1995 with approximately $250 million of capital commitments. [12]

Lone Star Opportunity Fund, L.P. followed in 1996, with approximately $396 million of capital commitments. [13] At that time Brazos Advisors, LLC was renamed Hudson Advisors LLC. [14]

After an expansion into Canada in 1995 and 1996, Grayken pursued the launch of a global platform for Lone Star in 1997. [15] Since then, Lone Star has invested extensively in North America, Europe and East Asia. [16] Lone Star invested primarily in East Asia, including Japan, Korea, Indonesia and Taiwan, following the Asian financial crisis in the late 1990s. [17] In the mid-2000s, following the establishment of the Eurozone, Lone Star increased its investment focus in Europe. [11] And with the onset of the global financial crisis, from 2007 Lone Star was again actively investing in the U.S. [9]

Through its credit affiliate, LStar Capital (officially LSC Film Corporation), the company entered the motion picture financing sector when they signed a $200 million deal with Sony Pictures in early 2014. The deal gives them a financial stake in nearly all of Sony's upcoming films. [18] However, due to the poor box-office performance of Sony's movies, the two firms severed ties on July 17, 2017, two years before the deal was set to end. [19]

In July 2015, Lone Star acquired the UK property investment and development company Quintain for £700 million. [20]

In March 2017, the Portuguese Central Bank announced that Lone Star Funds will acquire 75% of third largest Portuguese bank, Novo Banco, in return for a capital injection of €1bn. [21] The other 25% will be retained by the Portuguese bank's resolution fund. In October 2017 the deal was closed and Lone Star Funds started controlling 75% of Novo Banco. [22]

Investment approach

Lone Star invests in a variety of asset classes, primarily asset-heavy and/or cash flowing opportunities in developed markets. [23]

Funds

The following list shows the company's various funds. [24]

Fund Vintage
Year
Committed
Capital
Lone Star Real Estate Fund VII2024$2.7B [25]
Lone Star Fund XII2023$5.3B [26]
Lone Star Residential Mortgage Fund III2022$657M [26]
Lone Star Value-Add Fund II2022$619M [26]
Lone Star Value-Add Fund I2020$759M [27]
Lone Star Real Estate Fund VI2019$4.7B [28]
Lone Star Residential Mortgage Fund II2019$761M [28]
Lone Star Fund XI2019$8.1B [29]
Lone Star Fund X2017$5.5B [29]
Lone Star Real Estate Fund V2016$5.8B
Lone Star Real Estate Fund IV2015$5.8B [30]
Lone Star Residential Mortgage Fund I2015$1.3B [31]
Lone Star Fund IX2014$7.2B [32]
Lone Star Real Estate Fund III2013$7.0B
Lone Star Fund VIII2013$5.1B
Lone Star Fund VII2010$4.6B
Lone Star Real Estate Fund II2010$5.5B
Lone Star Fund VI2008$7.5B
Lone Star Real Estate Fund2008$2.4B
Lone Star Fund V2005$5.1B
Lone Star Fund IV2002$4.2B
Lone Star Fund III2000$2.3B
Lone Star Fund II1999$1.2B
Lone Star Opportunity Fund1997$396M
Brazos Fund1995$250M

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References

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  3. "Two Palm Beach Senior Communities Sell for $57M". The Real Deal South Florida. 2021-06-03. Retrieved 2021-12-21.
  4. Carlisle, Candace (11 April 2024). "Lone Star Promotes Executive to CEO, Global President Roles". CoStar News.
  5. Chad Eric Watt (August 22, 2010). "Lone Star selling S.E. grocery chain". Dallas Business Journal.
  6. "Company Overview of Lone Star Funds". Bloomberg BusinessWeek. Archived from the original on September 27, 2008. Retrieved November 24, 2013.
  7. "About Hudson Advisors". Hudson Advisors.
  8. "History and Experience". Hudson Advisors.
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  10. Jenny Anderson (July 30, 2008). "An Investment Firm That Prospered From Past Crises Turns to Mortgages". The New York Times .
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  14. "Brazos Advisors renamed Hudson Advisors; corporate offices relocated". Business Wire. April 9, 1997.
  15. "Los Angeles Department of Water and Power Retirement Board Interdepartmental Correspondence" (PDF). Los Angeles Department of Water and Power Retirement Board. August 18, 2010.
  16. "Ahold completes Bruno's, Bi-Lo sale". Birmingham Business Journal. January 31, 2005.
  17. Keith Russell (April 7, 2002). "Shoney's a typical fit for Lone Star Funds". The Tennessean.
  18. "Sony Nails $200 Million Co-Financing Deal with LStar Capital, Citibank". The Wrap. April 9, 2014.
  19. Faughnder, Ryan (2017-07-17). "Sony Pictures and co-financing partner LStar Capital cut ties". Los Angeles Times. ISSN   0458-3035 . Retrieved 2017-07-19.
  20. Kollewe, Julia (29 July 2015). "Lone Star buys Wembley Arena owner Quintain for £700m". The Guardian. Retrieved 29 July 2015.
  21. Chad Bray (March 31, 2017). "Lone Star to Buy Controlling Stake in Portugal's Novo Banco". The New York Times .
  22. "Lone Star takes charge of Portugal's state-rescued Novo Banco". Reuters. October 18, 2017.
  23. Kelly DePonte (May 2010). "An overview of the private equity distressed debt and restructuring markets" (PDF). Probitas Partners. Archived from the original (PDF) on 2013-03-30. Retrieved 2013-11-28.
  24. "The Funds". Lone Star Funds. Retrieved November 15, 2013.
  25. Brasse, Jonathan (13 September 2024). "Lone Star starts LSREV VII investing with 580mUK portfolio deal". PERE.
  26. 1 2 3 Barreto, Sergio (3 July 2024). "Lone Star closes latest opportunistic fund at $5.3bn". Alternatives Watch.
  27. "Lone Star Value-Add Fund I, L.P." Formsds. August 6, 2020. Retrieved December 1, 2021.
  28. 1 2 "Lone Star closes 6th commercial real estate fund at $4.7B". S&P Global. June 24, 2019. Retrieved December 1, 2021.
  29. 1 2 "Lone Star Funds Raises $8.2bn". Private Equity International. February 19, 2019. Retrieved December 1, 2021.
  30. Peter Flanagan (April 26, 2015). "Lone Star aims for more deals in Europe". Irish Independent.
  31. Steve Gelsi (January 5, 2015). "Lone Star's first home mortgage fund beats $1 bln target". Buyouts Insider. Retrieved December 1, 2021.
  32. Timothy Pollard (January 6, 2015). "Largest closed-end, private real estate funds raised in 2014". Pensions & Investments.