February 12, 2015
An organization chart for Lone Star Fund VIII from a Dec. 13, 2012 presentation to the New Mexico Educational Retirement Board. Both Len Allen and Bruno Scherrer left Lone Star soon after. As did Louis Paletta, who gave the presentation.

Lone Star Funds has been on a fundraising spree. The Texas-based institutional fund manager closed on its $7.2 billion Lone Star Fund IX last July, and hopes to raise an additional $5 billion for its latest real estate vehicle, Lone Star Real Estate Fund IV.

However, persistent executive and staff turnover at Lone Star and its affiliate Hudson Advisors LLCraise questions about whether the Lone Star Funds that investors are considering today is the same firm that they’ve trusted in the past – or the same firm that will manage their investments over the next several years.

Key Takeaways:

Senior managing directors Len Allen and Bruno Scherrer quietly left Lone Star in 2013, not long after investors raised concerns about executive turnover and successorship.

In 2014, Hudson Advisors’ US subsidiary (Hudson Americas LLC) lost half of its staff, including 43 percent of its managers and 37 percent of its asset managers. Only 15 percent of that turnover was voluntary.

Questions to Consider

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