Monday 23 July 2018

Lone Star to cut Irish asset workers as it scales back

Billionaire Lone Star founder John Grayken. Photo: YOUNG HO/SIPA/Newscom
Billionaire Lone Star founder John Grayken. Photo: YOUNG HO/SIPA/Newscom

Gretchen Friemann

Lone Star, the Dallas-based private equity fund that became a household name in Ireland after the crash, is scaling back its operations as the number of assets under management start to decline.

It is understood a number of staff overseeing its Irish assets have been told to find alternative jobs by March as the economic recovery forces the distressed debt player to recalibrate its operations here.

Overall, the retrenchments will leave a marginal dent on its workforce since most of its staff are engaged to servicing the firm's exposures in other European and overseas markets.

Hudson Advisors, its asset-management unit, currently employs close to 111 people and last year signed a lease for over 16,000 sq ft in central Dublin.

According to sources less than 10 positions will disappear in total although the job losses underscore Lone Star's waning appetite for soured loan acquisitions.

It is understood to harbour little interest in AIB's upcoming loan portfolio sale, which is expected to carry a face value of €3.7bn.

The firm, founded by billionaire John Grayken, reportedly shelled out close to €5bn for assets with a face value of about €13bn in the aftermath of the crash, and at one stage it even contemplated acquiring Nama.

Among its first purchases was a €650m portfolio in 2012 of distressed commercial property loans from the EBS book that fell into AIB's ownership.

Lone Star reportedly snatched up the mortgages for a near 60pc discount.

While it was in the vanguard of global private equity players swooping into the market, it has also led the subsequent retreat, offloading assets at a swift rate in order to maximise profit.

Yet even as its stack of soured Irish loans shrinks rapidly, Lone Star remains one of the biggest residential developers in the State.

The group's funds own debt attached to a handful of developers who they struck partnerships with including Joe O'Reilly's Castlethorn Construction, and Sean Mulryan's Ballymore Development.

In total, Lone Star holds interests in over 600 acres of land capable of delivering 7,000 homes.

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