Sunday 25 September 2016

Lone Star aims for more deals in Europe

Published 26/04/2015 | 02:30

Lone Star chief executive John Grayken
Lone Star chief executive John Grayken

ONE of the biggest buyers of Irish assets since the downturn has raised more than €5bn to spend on property in Europe and elsewhere.

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Lone Star Funds, which is headed by Irish American John Grayken, has closed its Lone Star Real Estate Fund IV after taking in some $5.8bn (€5.3bn) from various investors, including Mr Grayken himself.

The fund is believed to have been over subscribed by around $1bn.

Previous Lone Star funds have been used to invest in real estate globally. While this latest fund will invest around the world, it is expected to be focused mainly on Europe, with around two thirds of it being earmarked for this continent.

That would imply the fund will be deployed in Ireland among other locations.

The company has been very active in Ireland in recent years.

Last year it paid an estimated €3.5bn for most of the Project Rock and Project Salt portfolios of commercial property loans from IBRC.

It also bought most of the mortgage book of the former Start Mortgages from Investec.

The firm specialises in buying distressed assets at the bottom of a market and then selling them on at a huge profit once the market begins to turn.

Lone Star has begun churning its portfolio in recent days. It has afreed terms with US property firm Starwood Property Trust to offload €453m worth of offices and apartments in Dublin, including the Watermarque Building.

This is the latest big real estate fund to have closed in the last month. Blackstone closed its eighth real estate fund with a value of some $14.5bn. Earlier this month the firm said it was planning a new fund specifically for European assets.

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