Lone Star exits stake in German mortgage lender after four years


exit-sign-5_sqTexas-headquartered private equity firm Lone Star Funds has sold its stake in Düsseldorfer Hypothekenbank to a group of buyers including investment manager Attestor Capital and veteran investor Patrick Bettscheider.

Lone Star bought the Germany mortgage lender in 2010 tapping two of its funds for the deal, the LSF5 German Investments II and LSF5 Riverside.

The financial institution said that under the firm’s management, it has established itself as a “reliable partner in direct business with commercial real estate investors for financing investments in completed property”.

However, the Hypothekenbank failed to make a profit last year and has recorded a net loss of €26m in the first half of this year.

Once the transaction has closed, Düsseldorfer Hypothekenbank will convert its mandatory convertible bond into permanent equity, to help strengthen its core capital funding.

The mortgage lender was founded in 1997 as a specialist in the commercial real estate sector. It operates in Germany, the Netherlands and metropolitan regions in France and Spain.

Lone Star held a $7.2bn final close of its ninth distressed real estate fund earlier this month.

Copyright © 2014 AltAssets