Thursday 24 May 2018

American private equity mogul John Grayken (61) may not be a household name but his firm has become synonymous with so-called vulture funds that swooped in to buy distressed property assets at knockdown prices in post-crash Ireland.

Grayken - who renounced his American citizenship in 1999 reportedly for tax purposes and became an Irish citizen - is the founder and sole owner of Dallas-based Lone Star Funds, which has raised €67bn to buy up assets since he set it up in 1995.

Lone Star has partnered with a handful of high-profile Irish developers including Joe O'Reilly's Castlethorn Construction, and Sean Mulryan's Ballymore Group.

In total, Lone Star holds interests in over 600 acres of land with a potential to deliver 7,000 homes. However, it is scaling back its operations here as the number of assets under management start to decline.

The secretive Grayken's strategy is to buy distressed property assets in countries experiencing economic turmoil, clean them up and flip the assets for a profit. He made a fortune in Japan and South East Asia during the late 1990s and turned his attention to Ireland during the financial crisis. Lone Star was among the biggest buyers of loans and assets sold off by the Irish banks and Nama since the financial crisis.

Lone Star is estimated to have invested €5bn in Irish assets in the past four years across 10 transactions.

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. Last December it sold the Jurys Inn chain for €900m to a Swedish trade buyer. In August, Bank of Ireland agreed to buy a portfolio of mortgages from the private equity fund

A Forbes magazine profile said Grayken rules his empire with an iron fist, while the German press described the Lone Star boss as 'the Executioner from Texas' after his firm bought non-performing loans that resulted in homeowner foreclosure proceedings. Grayken runs his vast empire from the UK, where he owns a mansion in Chelsea, purchased for €66m through a Bermuda company, making it the most expensive house in the UK.

Grayken also splashed out €35m in 2016 on a 13,000-sq ft penthouse at the top of the new Millennium Tower Boston, a record for a condo in the city. Michael Dell of Dell Technologies is one of his well-heeled neighbours.

Grayken and his British-born wife Eilene made a $25m donation last year to the Boston Medical Centre - the largest in its history - to create the Grayken Centre for Addiction Medicine.

In disclosing their gift, the couple said they usually do charitable giving anonymously, but wanted to go public to destigmatise addiction and encourage others to follow their lead.

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