Fundraising - FEBRUARY 12, 2014

Lone Star launches ninth global debt fund

by Andrea Waitrovich

Lone Star Funds has launched a ninth global debt fund with a $7 billion fundraising goal, according to a filing with the SEC. A final close date for Lone Star Fund IX was not disclosed in the filing.

The firm started the fund series in 1997 with Lone Star Opportunity Fund, which raised $396 million. The following funds, Lone Star Funds II through VIII, became mega-funds, totaling approximately $30 billion in committed capital.

Lone Star Fund VIII closed in May 2013 with $5.1 billion raised in a 38-month period. The fund had five assets as of November 2013. Transactions consummated and targeted by Lone Star Fund VIII include investments in the United States, Western Europe and Japan in distressed loans and securities including single-family residential and corporate and consumer debt products as well as investments in financially oriented and asset-rich operating companies.

The largest fund by the firm as of November 2013 is Lone Star Fund VI, which closed in 2008 with $7.5 billion in equity commitments. Over its 24-month investment period, Lone Star Fund VI invested substantially all of its equity capital in approximately 28 investments comprising 79,209 assets with an aggregate purchase price of approximately $20.0 billion. Transactions consummated by Lone Star Fund VI included investments in distressed loans and securities including single-family residential, commercial real estate and consumer debt products, and financially oriented operating companies.

Recently, the firm closed its Lone Star Real Estate Fund III, which raised $7 billion, making it the largest closed-end real estate fund, according to Institutional Real Estate FundTracker.

Lone Star is a private equity firm that invests globally in distressed assets. Since the establishment of its first fund in 1995, Lone Star organized 12 private equity funds with aggregate capital commitments totaling more than $45 billion.

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