Lone Star’s sixth real estate fund, which is seeking to raise $3bn (€2.7bn), is expected to be backed up with uncalled capital from a predecessor fund.
According to sources familiar with the fund manager’s capital raising, Lone Star is planning to move uncalled capital from Lone Star Real Estate Fund V to Real Estate Fund VI.
Lone Star raised $5.8bn for Fund V in April of 2016.
The move is expected to benefit Fund V investors as they will be given a reduced management fee for Fund VI.
According to sources, investors are willing to wait for their capital to be invested due to Lone Star’s strong track record. Usually, limited partners would want their uncalled capital returned before committing to a follow-on fund.
Fund VI recently received a $50m commitment from the New Mexico Educational Retirement Board. South Dakota Investment Council also said it had committed to the fund.
Fund VI will target debt and equity investments in Western Europe, North America, Asia, and Central and South America.