Lone Star Funds
|Headquarters||Tower at Cityplace
Dallas, Texas, U.S.
|John Grayken, founder & chairman|
|Products||Investments, private equity funds|
|Total assets||$45 billion|
Lone Star Funds is a US private equity firm that invests in distressed assets both in the US and internationally. The founder of Lone Star established its first fund in 1995 (under a different name) and Lone Star has to date organized fifteen private equity funds with total capital commitments since inception of over $59 billion (as of June 2015). Lone Star’s investors include corporate and public pension funds, sovereign wealth funds, university endowments, foundations, fund of funds and high-net-worth individuals. Lone Star Funds has affiliate offices in North America, Europe and Japan.
Hudson Advisors LLC, an approximately 800-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. In this capacity, Hudson Advisors LLC has managed in excess of $95 billion of assets for Lone Star Funds since inception.
Lone Star was founded by John Grayken. 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, that resolved approximately 1,300 “bad bank” assets resulting from the U.S. savings and loan crisis in the early ‘90s. 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.
After an expansion into Canada in 1995 and 1996, Grayken pursued the launch of a global platform for Lone Star in 1997. Since then, Lone Star has invested extensively in North America, Europe and East Asia. Lone Star invested primarily in East Asia, including Japan, Korea, Indonesia and Taiwan, following the Asian financial crisis in the late 1990s. In the mid-2000s, following the establishment of the Eurozone, Lone Star increased its investment focus in Europe. And with the onset of the global financial crisis, from 2007 Lone Star was again actively investing in the U.S.
Lone Star invests in a variety of asset classes, primarily distressed opportunities in developed markets.
In 2013, the United States Consumer Financial Protection Bureau issued a consent order against a subsidiary for making false statements about auto loans to soldiers and veterans. The company was required to refund $3.3 million to servicemembers. In June 2015, a year after its acquisition by Lone Star Funds, the company announced that it would wind down the program and cease taking on new customers.
In October 2015, the UK Financial Conduct Authority ordered an affiliate to refund £15.4 million to 147,000 customers after finding that the company was lending more to borrowers than they could afford to repay.
Lone Star Funds established residential lender Caliber Home Loans in 2013. Caliber Chairman and CEO Joe Anderson is a former manager of Countrywide Financial’s Consumer Markets Division. Caliber’s Chief Operating Officer, Chief Financial Officer, and Executive Vice President of Operations are former Countrywide executives.
The New York Times reported in September 2015 that "the acquisition of distressed mortgages by Lone Star is the engine in a well-oiled securitization machine that assumes that foreclosure and resale of the homes are inevitable components of the process." In October 2015, the New York Times reported that New York Attorney General Eric Schneiderman had opened an investigation into Caliber Home Loans after receiving a "surge in consumer complaints."
Funds investment vehicles
|Lone Star Real Estate Fund IV||2015||$5.8B|
|Lone Star Residential Mortgage Fund I||2015||$1.3B|
|Lone Star Fund IX||2014||$7.2B|
|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|
- "Fund Summary".
- Ellie Pullen (April 29, 2013). "Lone Star and Credit Suisse buy €6.7bn RPI portfolio". Unquote.com.
- "Kardan sells 27.75% stake in CEE real estate company GTC SA". Property EU. November 17, 2013.
- Chad Eric Watt (August 22, 2010). "Lone Star selling S.E. grocery chain". Dallas Business Journal.
- "Company Overview of Lone Star Funds". Bloomberg BusinessWeek. Retrieved November 24, 2013.
- "About Hudson Advisors". Hudson Advisors. Retrieved November 24, 2013.
- "Hudson Advisors, L.L.C.". Inside View. Retrieved November 24, 2013.
- Megan Barnett (April 29, 2013). "Lone Star". Unquote.com.
- Jenny Anderson (July 30, 2008). "An Investment Firm That Prospered From Past Crises Turns to Mortgages". The New York Times.
- Steve Bills (May 30, 2013). "Distress Specialist Lone Star Turns To Europe". Thomson Reuters.
- "About Lone Star". Lone Star Funds. Retrieved November 25, 2013.
- "Hudson Advisors Successful Track Record". Hudson Advisors. Retrieved November 25, 2013.
- "Brazos Advisors renamed Hudson Advisors; corporate offices relocated". Business Wire. April 9, 1997.
- "Los Angeles Department of Water and Power Retirement Board Interdepartmental Correspondence" (PDF). Los Angeles Department of Water and Power Retirement Board. August 18, 2010.
- "Ahold completes Bruno's, Bi-Lo sale". Birmingham Business Journal. January 31, 2005.
- Keith Russell (April 7, 2002). "Shoney's a typical fit for Lone Star Funds". The Tennessean.
- Kollewe, Julia (29 July 2015). "Lone Star buys Wembley Arena owner Quintain for £700m". The Guardian. Retrieved 29 July 2015.
- Kelly DePonte (May 2010). "An overview of the private equity distressed debt and restructuring markets" (PDF). Probitas Partners.
- "Lone Star Funds to Buy DFC Global," Wall Street Journal, 4/2/2014
- CFPB press release issued 6/27/2013
- Company website accessed 11/3/2015
- "Dollar Financial ordered to repay £15.4 million to customer," The Guardian, 10/26/2015
- FCA press release issued 10/26/2015
- Joe Anderson LinkedIn profile accessed 11/2/2015
- Russ Smith LinkedIn profile accessed 11/2/2015
- Stephen Smith LinkedIn profile accessed 11/2/2015
- Tammy Richards LinkedIn profile accessed 11/2/2015
- "As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages," New York Times, 9/28/2015
- "New York Attorney General Examining Private Equity Firm’s Mortgage Business," New York Times, 10/6/2015
- "The Funds". Lone Star Funds. Retrieved November 15, 2013.
- Peter Flanagan (April 26, 2015). "Lone Star aims for more deals in Europe". Irish Independent.
- Steve Gelsi (January 5, 2015). "Lone Star's first home mortgage fund beats $1 bln target". Buyouts Insider.
- Timothy Pollard (January 6, 2015). "Largest closed-end, private real estate funds raised in 2014". Pensions & Investments.