Lone Star’s $1B Close On $5B Fund

Firm: Lone Star Investment Advisors

Fund: Lone Star Fund VIII

Target: $5 billion

Amount Raised: $1 billion

Placement Agent: None

The Dallas-based shop has a $5 billion target for the fund, according to a person with knowledge of the firm’s plans. The firm, founded in 1995, invests in both distressed debt and equity around the world. According to the Lone Star Web site, the firm has organized funds with aggregate capital commitments of more than $33 billion.

The latest fund actually constitutes two parallel pools. The larger of the two filings was for a fund designated as Lone Star Fund VIII (Bermuda) LP, which has attracted $675  million in commitments from three investors, while the smaller pool, Lone Star Fund VIII (U.S.) LP, has attracted $333 million from 21 investors, the filings showed.

Lone Star is not paying a placement agent, the filings showed.

Among investors is the Dallas Police and Fire Pension System, which committed $25 million to Fund VIII.

In December, Lone Star announced the sale of Petroplex Acidizing to One Rock Capital Partners. Based in Midland, Texas, Petroplex Acidizing provides chemical stimulation treatments for oil, gas and injection wells. Lone Star, which acquired the company in October 2007, said the sale of the company gave it a 50 percent IRR and 6.24x cash-on-cash return.

Some of the firm’s investments have been more problematic, such as the firm’s long-running dispute with the South Korean government over the its planned sale of Korea Exchange Bank to Hana Financial Group for roughly $3.5 billion.