Lone Star Funds closes Australian headquarters

One and Two Dollar Coins Australian ten dollar note in the background - Australian Currency, cash money generic

US-based private equity giant Lone Star Funds is understood to have withdrawn from the Australian market.

The local operations have been headed by former Macquarie banker and Fortress Investment Group executive Jason Howes, who has worked as a managing director for the US-based private equity firm.

However, the understanding is that it has since closed its Australian office, with Mr Howes departing last month.

Lone Star started operating with a base in Sydney under the watch of Mr Howes from September 2016.

A year before, it bid for GE Capital’s Australian-based loans, but missed out on the $2bn portfolio to Sankaty Advisors, which is now called Bain Capital Credit.

It also made an offer for AWE in 2016 and also took out Sino Gas and Energy two years ago in a $530m takeover bid.

Other targets it has cast its eye over includes the retirement village operator Aveo Group, which was purchased by Brookfield for $1.3bn, while last year, Lone Star was also believed to be assessing an acquisition of Boral, which is the country’s largest building materials provider with a major presence in the US.

However, a deal never eventuated.

Founded in 1995, the Texas-based private equity firm globally is known as one that typically targets distressed assets and is believed to have more than $US45bn ($64.3bn) of assets under management.

While Lone Star has retreated, other private equity firms are paying closer attention to Australia, with European fund EQT opening an office in Sydney last year to be headed by Ken Wong.

Swedish private equity firm EQT last year bid for the Australian telecommunications provider Vocus Group.