Starwood Capital Closes $4.2B Oppty. Fund

GREENWICH, CT-Starwood Capital Group said Monday it had closed its latest global fund, with Starwood Distressed Opportunity Fund IX reaching its cap of $4.2 billion from more than 75 investors. The private equity giant launched SOF IX in the summer of 2011 with an initial target reported between $2 billion and $3 billion, and has been actively investing the fund since the end of last year, with InTown Suites and LNR Property LLC among its acquisitions.

“We are grateful for our investors' continued support and confidence in our team, which have been instrumental to our success since our founding in 1991,” Barry Sternlicht, chairman and CEO of Starwood Capital, says in a release. “We have now grown to manage more than $23 billion in assets on behalf of clients across our six main product lines: Global Real Estate Investing; Energy Infrastructure through Starwood Energy Group; Global Real Estate Long Short Investing through Starwood Real Estate Securities; Retail Investments through Starwood Retail Partners based in Chicago; Hotel Branding and Management through SH Group; and Global Real Estate Finance through Starwood Property Trust in the US and Starwood Capital Europe Advisers in the United Kingdom.”

The firm scaled back its pace of acquisitions during the market's peak, finding that the pricing didn't make sense. From 2009 on, though, Starwood Capital has been out in the market. It fully invested the $2.8 billion of Starwood Global Opportunity Fund VIII and Starwood Hospitality Fund II, which closed in March of 2010, in a variety of assets including more than 18,000 single family lots, interests in more than 9,000 multifamily units, the purchase of six distressed bank loan pools and more than 70 domestic hotels.

“We have already invested or committed approximately $2 billion of equity capital in the US and Europe,” says Jerome Silvey, EVP and CFO at Starwood Capital, in the release. “The fund, like all Starwood vehicles, is diversified by product type and geography and includes interests in several bank loan pools, distressed debt, more than three million square feet of office, one million square feet of retail, 15,000 multifamily units and more than 150 hotel properties.”

Earlier this month, Starwood Capital hired Zsolt Kohalmi, formerly CIO at Meyer Bergman, to head up its European acquisition efforts. He'll be in charge of significantly growing Starwood's European private equity portfolio across the continent, through SOF IX and other vehicles.