Lone Star nears target for Fund X

The alternative asset manager’s venture would make between 20 and 30 investments.

Lone Star Funds has pulled in $4.48 billion for its latest distressed debt fund just four months after it launched the investment vehicle, regulatory filings reveal.

The Dallas-based alternative asset manager on 12 October 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.

Among the commitments Lone Star has received 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 atop the Private Debt Investor’s top 10 fundraising rankings In April, Lone Star also closed a $5.9 billion for a distressed real estate fund. Aside from credit and real estate, the firm also invests in equity.