Lone Star acquires diversified portfolio from Moorfield for €1.3b

US private equity group Lone Star has acquired a diversified real estate portfolio in the UK from two 2005-2007 vintage Moorfield funds for about £1 bn (€1.3 bn).

Moorfield Real Estate Fund (MREF) and Moorfield Real Estate Fund II (MREFII) have exchanged contracts for the transaction with Lone Star, and the transaction is to complete early next year.

The portfolio comprises both traditional real estate investments (retail and offices) as well as alternative assets (hotels, residential and student accommodation). UK-based fund manager Moorfield will continue in its role as asset manager, alongside Hudson Advisors.

MREF was raised in 2005 with MREFII following in 2007. Both private equity real estate funds are managed by Moorfield Group.

Moorfield CEO Marc Gilbard said: 'This is the largest transaction that Moorfield has undertaken in its corporate history and is a very effective way for MREF and MREFII to realise the majority of their investments. We are very pleased with the investment performance this will give to our investors and it allows us to focus on optimising the value of the remaining assets in these funds together with investing our recently raised MREF.'

The transaction was carried out ‘off-market’ with Doherty Baines acting on behalf of Lone Star. Herbert Smith Freehills and PWC acted for Moorfield while Allen & Overy and PWC acted for Lone Star. More details about the assets involved will be released on completion of the transaction in early 2015.