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Lone Star Funds

From Wikipedia, the free encyclopedia
Lone Star Global Acquisitions, Ltd.
Company typePrivate
IndustryPrivate equity
Founded1995; 29 years ago (1995)
FounderJohn Grayken
HeadquartersDallas, Texas, United States
Key people
ProductsPrivate equity, real estate, credit
AUM$95 billion (2024)
Websitewww.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]

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

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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

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

Funds

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

Fund Vintage
Year 		Committed
Capital
Lone Star Real Estate Fund VII 2024 $2.7B[25]
Lone Star Fund XII 2023 $5.3B[26]
Lone Star Residential Mortgage Fund III 2022 $657M[26]
Lone Star Value-Add Fund II 2022 $619M[26]
Lone Star Value-Add Fund I 2020 $759M[27]
Lone Star Real Estate Fund VI 2019 $4.7B[28]
Lone Star Residential Mortgage Fund II 2019 $761M[28]
Lone Star Fund XI 2019 $8.1B[29]
Lone Star Fund X 2017 $5.5B[29]
Lone Star Real Estate Fund V 2016 $5.8B
Lone Star Real Estate Fund IV 2015 $5.8B[30]
Lone Star Residential Mortgage Fund I 2015 $1.3B[31]
Lone Star Fund IX 2014 $7.2B[32]
Lone Star Real Estate Fund III 2013 $7.0B
Lone Star Fund VIII 2013 $5.1B
Lone Star Fund VII 2010 $4.6B
Lone Star Real Estate Fund II 2010 $5.5B
Lone Star Fund VI 2008 $7.5B
Lone Star Real Estate Fund 2008 $2.4B
Lone Star Fund V 2005 $5.1B
Lone Star Fund IV 2002 $4.2B
Lone Star Fund III 2000 $2.3B
Lone Star Fund II 1999 $1.2B
Lone Star Opportunity Fund 1997 $396M
Brazos Fund 1995 $250M

References

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  1. ^ Ellie Pullen (April 29, 2013). "Lone Star and Credit Suisse buy €6.7bn RPI portfolio". Unquote.com. Archived from the original on June 29, 2015. Retrieved November 26, 2013.
  2. ^ "About Lone Star". Lone Star Funds.
  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.
  9. ^ a b Megan Barnett (April 29, 2013). "Lone Star". Unquote.com.
  10. ^ Jenny Anderson (July 30, 2008). "An Investment Firm That Prospered From Past Crises Turns to Mortgages". The New York Times.
  11. ^ a b Steve Bills (May 30, 2013). "Distress Specialist Lone Star Turns To Europe". Thomson Reuters.
  12. ^ "About Lone Star". Lone Star Funds. Retrieved November 25, 2013.
  13. ^ "Hudson Advisors Successful Track Record". Hudson Advisors. Archived from the original on December 2, 2013. Retrieved November 25, 2013.
  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. ^ a b c 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. ^ a b "Lone Star closes 6th commercial real estate fund at $4.7B". S&P Global. June 24, 2019. Retrieved December 1, 2021.
  29. ^ a b "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.
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