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Lone Star buys Moorfield RE portfolio for £1bn

Investments in the portfolio include hotel property chains Mercure and MGalleries and a Winchester, England student accommodation.

Lone Star Funds has acquired a portfolio of real estate investments from Moorfield Group for £1 billion ($1.53 billion; €1.35 billion), according to a statement from Moorfield.

The portfolio consists of real estate investments made from Moorfield’s 2005-vintage Real Estate Fund I (MREF) and 2007-vintage Fund II (MREFII).

“This is the largest transaction that Moorfield has undertaken in its corporate history and is a very effective way for MREF and MREFII to dispose of the majority of their investments,” Marc Gilbard, the chief executive officer of Moorfield, said in the statement.

MREF raised £265 million, above its £250 million target. The Board of Regents of the University of Michigan Board committed £15 million to the fund. Other limited partners include the Rockefeller Foundation and the California State Teachers’ Retirement System (CalSTRS), according to PEI’s Research and Analytics division.

MREFII raised £380 million from LPs including Netherlands pension fund MN and the Andrew W Mellon Foundation.

The properties in the portfolio include London-based office and retail property The Salisbury, hotel property chains Mercure and MGalleries and a Winchester, England student accommodation named Domain (Queens Road).

Moorfield will continue to manage the assets, alongside Hudson Advisors, the asset management company of Lone Star, the statement disclosed.

The real estate direct secondaries deal was closed ‘off-market’.

“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 MREFIII,” Gibard added.

Fund III is a 2013-vintage fund that raised £250 million, PEI data disclosed.