Lone Star has taken control of £60m of debt provided to fund manager Pradera, which is currently up for sale.
The US private equity firm has acquired the medium-term loan as part of its purchase of Commerzbank’s legacy Eurohypo Spanish lending business in the €4.4bn (£3.5bn) Project Octopus process.
The single loan is understood to be secured by a number of assets in Pradera’s European Retail Fund 2, which was launched in 2006 and invests in southern European property with a core-plus strategy.
The nine-asset fund was hit by falling valuations in the downturn. As a result, its loan-to-value ratios rose to 76%, which breached its banking covenants.
Lone Star, in partnership with JP Morgan, has just completed the purchase of the loan portfolio.
The US private equity firm bought €1.5bn of sub- and non-performing loans and the investment bank took the €2.2bn performing tranche.
One source said Pradera is expected to refinance the debt.
In March this year it emerged that Pradera appointed the New York investment bank Berkshire Capital to advise on options for the London-headquartered business, which has €2.3bn of assets under management.
This includes potential sale, recapitalisation, or a partial sale. It is understood that the firm, which specialises in European retail, has been in serious discussions with a number of suitors over a sale of the fund management platform.
The move was prompted by senior stakeholders Paul Whight and Colin Campbell looking for an exit for their investment in the business, which is led by ex-JER Partners director James Bury as chief executive.
Bury works alongside managing directors Roberto Limetti and Neil Varnham at the firm, which has in recent years formed joint ventures with Tristan Capital Partners, AEW Europe and Brockton Capital.
bridget.oconnell@estatesgazette.com
