Lone Star Funds has pulled in $4.48 billion for its latest distressed debt fund just four months after it launched the investment vehicle, PERE's sister publication, Private Debt Investor, reported Wednesday.
The Dallas-based alternative asset manager on October 12 submitted documents with the SEC showing it is closing in on its $6 billion target for Lone Star Fund (US) X. This is an increase from its initially reported target of $5 billion, which was disclosed in a June regulatory filing. In April, Lone Star closed a $5.9 billion for its fifth distressed real estate fund after just five months of fundraising. The real estate series of funds at Lone Star targets commercial real estate debt and equity investments in the Americas, Western Europe and Asia Pacific.
Among the commitments Lone Star has received for Lone Star Fund X so far are $75 million from the Teachers’ Retirement System of Louisiana and $150 million from the New Mexico Educational Retirement Board.
According to documents presented at the Louisiana pension fund’s latest meeting, Fund X will focus on distressed real estate with property values between $26 million and $2.7 billion.
The vehicle, which would make 20 to 30 investments, has an expected investment hold period of two to five years and set a target of 25 percent internal rate of return, the documents showed. The pension fund’s advisor, Hamilton Lane, conducted due diligence from July to September, the documents show.
The previous incarnation, Fund IX, closed on $7.2 billion in August 2012. That fund, so far, has achieved a 10.9 percent IRR and made 13 investments, the documents revealed. Fund VIII, which closed in 2013, raised $5.1 billion and posted an IRR of 31.2 percent.
Founded in 1995, Lone Star has amassed prodigious amounts of capital. The firm finished second atop PERE's top 10 fundraising rankings earlier this year. Aside from credit and real estate, the firm also invests in equity.