Lone Star Funds loads $5.3B of dry powder for distressed CRE

It didn’t take Lone Star Funds CEO Donald Quintin long to get a load of dry powder ready for the distress playing out in commercial real estate markets in Texas and beyond.

Quintin took the top job at Lone Star, the Dallas-based firm with $36 billion in assets under management, three months ago. Last week the firm closed a $5.3 billion fund raised to go after distressed assets in real estate and other sectors, the Dallas Business Journal reported. 

The fund will aim to invest in ailing assets that need capital and stronger management to add value.

“We will continue to seek value primarily in companies that are affected by ongoing macroeconomic uncertainty and distressed corporate credits … across different markets and asset classes,” Quintin said in a statement.

The fund, Lone Star Fund XII LP, raised 35 percent less than the firm’s previous fund, which closed at $8.1 billion in 2019. The same year, the fund sold off a $472.5 million multifamily portfolio in Long Island, New York, and a $1.1 billion portfolio in Maryland and Virginia.

Private equity activity was slow in the first half of the year. The industry raised $422 billion globally through May 15, according to Bain & Company. That’s 16 percent less than the $438 billion raised in the same period last year.

The closing of the fund marks a milestone for Lone Star under the leadership of Quintin, who took the CEO’s post after serving for more than 10 years as president of various other funds.

The private equity giant once called “the John Show” — a reference to founder John Grayken and his lack of interest in building a legacy that outlasts him. But Grayken handed the reins to Quintin, the firm’s first CEO, in April.

Founded in 1995, the firm counts pension funds, sovereign wealth funds, foundations and endowments among its investors. 

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