DALLAS--Dallas-based Lone Star Real Estate Fund III has entered into an off-market agreement with U.K.-based Moorfield Real Estate Fund (MREF) and Moorfield Real Estate Fund II (MREFII) to purchase a $1.5 billion (1 million pound) diversified real estate investment portfolio.

The portfolio comprises both retail and office as well as hotels, residential and student housing. Moorfield Group (Moorfield) will continue to have a role as asset manager, alongside Hudson Advisors, to ensure there is continuity of asset management initiatives, asset knowledge and stakeholder relationships.

Reps for Lone Star declined to comment further on the deal.

The transaction was done coordinated with Doherty Baines acting on behalf of Lone Star. Herbert Smith Freehills and PWC acted for Moorfield and Allen & Overy and PWC acted for Lone Star.

“This is the largest transaction that Moorfield has undertaken in its corporate history and is a very effective way for MREF and MREFII to realize the majority of their investments,” Marc Gilbard, CEO of Moorfield Group said. “We are very pleased with the investment performance this will give to our investors and it allows us to focus on optimizing the value of the remaining assets in these funds together with investing our recently raised MREFIII. We are also glad to be able to continue to work with Lone Star and Hudson Advisors to ensure further value is crystalized from the assets that they have acquired.”

“We are pleased to be acquiring this significant and diversified portfolio of quality assets where there are ongoing asset management opportunities,” Angus Dodd, senior managing director at Lone Star, said in a news release. “We are looking forward to working with Moorfield and Hudson Advisors to optimize the value of these assets.”

More details of the assets involved will be released on completion in early 2015.

Lone Star Real Estate Fund III (U.S.) LP and Lone Star Real Estate Fund III (Bermuda) LP (collectively known as “Lone Star Real Estate Fund III”), was formed in October 2013, held their final closings in October 2013 with approximately $7 billion in combined capital commitments. Transactions consummated and targeted by Lone Star Real Estate Fund III include investments in commercial real estate debt and equity products in the Americas, Western Europe and Japan.