Starting with 1995's Brazos Fund, John Grayken's low-profile Lone Star Funds began establishing a track record recognized throughout the industry as one of the best. Cutting his teeth in the real estate division of investment bank Morgan Stanley and, later, working on real estate and bad debt deals with Texas billionaire Robert Bass, Grayken quickly learned the ins and outs of private equity real estate in the US and Europe. But it has been the high-profile, asset-heavy distressed deals in Asia that have garnered the most accolades from investors and competitors alike.
Last year, the firm sold its stake of the Tokyo Star Bank, scoring a seven-fold return in the process. And by scooping up Japanese golf courses at the bottom of the market, Lone Star's Pacific Gold International Holdings is now Japan's largest golf operator.
But perhaps Lone Star is most associated with its numerous investments in Korea, where it is reportedly the largest foreign investor. In 2001, the firm acquired the Star Tower in Seoul for 620 billion won ($480 million; €370 million), the largest property deal in Korea at the time. More recently, Lone Star has been mired in an ongoing struggle with the Korean government over the sale of Korea Exchange Bank. The controversy became so heated that the secretive Grayken adopted a more public PR strategy to combat his firm's negative image.
Of course, Grayken's limited partners are somewhat indifferent to the opinions of the South Korean public?they're likely smiling all the way to the bank.