EUROPEAN NEWS: Lone Star’s next move in the UK

Dallas-based Lone Star Funds has issued a typically understated yet important signal of its intent in Europe by opening an office in London for servicing arm, Hudson Advisors.

Those with knowledge of Hudson’s activities in Europe say there are currently a very small number of professionals from the captive loan workout specialist in Lone Star’s London headquarters. However, Lone Star wants a dedicated office owing to various UK loans closed on by the firm last year.

Hudson HQ

The deal-led extension is also a sign Lone Star continues to believe the UK will be a big market over the next few years. 

Last year, the firm bought around €5 billion face value of European real estate debt – significantly more than any other operation. Some of those debt positions are in UK loans.

One of the most significant European deals was the acquisition of a reported €2 billion-plus debt book from bank Credit Suisse. Additional reports suggested Credit Suisse retained a 49 percent equity interest in the deal.

Hudson’s European operation is headquartered in Frankfurt, where the firm entered some jumbo non-performing loans last decade. The new London office is being staffed partly with Hudson’s Germany professionals but the plan is to recruit more widely.

Hudson issued a short statement about the move through a London PR agency without much fanfare.
It adopted the same low key approach when it hired former JER Partners’ deal professional, Angus Dodd, to run investments in the UK last year.

In 1998, Hudson opened offices in Tokyo, later becoming one of the largest servicers of secured and corporate unsecured debt in the country. Frankfurt came in 2003, and was followed by an office in Munich the following year.

According to Fitch ratings, Hudson has around $72 billion of assets under management globally as of June 2009.