Lone Star Funds

Lone Star Funds is a global private equity firm established in 1995, headquartered in Dallas, Texas, with additional offices across North America, Europe, and Asia. The firm operates as a value investor, specializing in identifying opportunities within complex or transitional situations, irrespective of the prevailing market environment. Its core mission involves unlocking value through a disciplined, flexible, and expert-driven approach, focusing on assets and cash flow rather than specific geographies or sectors.

Lone Star Funds' investment strategies encompass private equity, credit, and real estate. Within private equity, it targets corporate investments, financial institutions, and fulcrum corporate debt. Its credit strategy includes corporate credit and performing mortgage investments, while its real estate focus involves both debt and equity commercial real estate opportunities. The firm actively acquires distressed debt and equity assets, including corporate, commercial real estate, single-family residential, and consumer debt products, as well as banks and asset-rich operating companies. Since its inception, Lone Star has organized 26 private equity funds with aggregate capital commitments totaling approximately $96 billion.

In terms of leadership, John P. Grayken serves as the founder and Chairman, while Donald J. Quintin was appointed as the company's first Chief Executive Officer in April 2024. Recent activities include the April 2026 announcement of transformational dual acquisitions of RadiciGroup's High Performance Polymers and Specialty Chemicals Businesses and DOMO Engineered Materials, and the completion of the sale of novobanco to BPCE. In March 2026, Lone Star completed the acquisition of Alliance Ground International and announced the final closing of Residential Mortgage Fund IV. The firm also agreed to acquire the Capsules & Health Ingredients Division of Lonza Group AG in March 2026. In July 2024, Lone Star closed its latest opportunistic fund, Lone Star Fund XII, with $5.3 billion, earmarked for investments in companies affected by macroeconomic uncertainty and distressed corporate credits.

Latest updates

Lone Star Creates Global Polymer Compounder Through $3.5 Billion Dual Acquisition

Event summary

  • Lone Star Funds has completed the acquisition of RadiciGroup’s High Performance Polymers and Specialty Chemicals businesses.
  • An affiliate of Lone Star Fund XII, L.P. has signed binding agreements to acquire DOMO Engineered Materials (DOMO EM).
  • The combined entity will form a global, tier-1 compounder, leveraging brands including RadiciGroup, DOMO, and TECHNYL®.
  • Jochen Fabritius, previously with Lone Star, has been appointed CEO of the newly formed platform.
  • The RadiciGroup acquisition concludes a process initiated in February 2025.

The big picture

Lone Star’s acquisition of RadiciGroup and DOMO EM represents a significant consolidation play within the global polymer compounding market, creating a new, independent competitor with substantial scale. The deal, estimated to be worth over $3.5 billion, underscores Lone Star’s strategy of acquiring complex businesses and leveraging operational expertise to drive value. This move positions the combined entity to capitalize on growing demand for high-performance materials across various industries, but also introduces integration challenges inherent in combining disparate operations.

What we're watching

Integration Risk
Successfully integrating RadiciGroup and DOMO EM’s operations, cultures, and technologies will be critical to realizing the anticipated synergies, and potential clashes are likely.
Market Dynamics
The automotive sector’s shift towards electric vehicles and lightweighting will heavily influence the combined platform’s growth trajectory and necessitate continued innovation in advanced materials.
Debt Load
Given Lone Star’s private equity model and the size of the acquisitions, the combined entity’s debt load will be a key factor in its long-term financial stability and ability to invest in future growth.

Lone Star Exits Novo Banco for €6.7 Billion, Capping Eight-Year Transformation

Event summary

  • Lone Star Funds has completed the sale of its majority stake in Novo Banco to BPCE for a final price of €6.7 billion as of April 30, 2026.
  • The initial agreement, reached in June 2025, priced the acquisition at €6.5 billion, reflecting a 7.85x price-to-earnings multiple based on 2025 net profit.
  • Lone Star acquired a 75% stake in Novo Banco in 2017 and oversaw a restructuring program.
  • Novo Banco is Portugal’s fourth-largest bank, with 2025 net profit of €828 million.

The big picture

Lone Star’s exit from Novo Banco represents a successful conclusion to a value-creation strategy focused on distressed assets. The acquisition by BPCE, a €55 billion banking group, signals a consolidation trend within the European banking sector, as larger institutions seek to expand their presence in smaller markets. This deal highlights Lone Star’s expertise in navigating complex situations and extracting value from underperforming assets, a strategy consistent with their broader investment mandate.

What we're watching

Integration Risk
The success of the acquisition hinges on BPCE’s ability to effectively integrate Novo Banco’s operations and culture, potentially facing challenges given the bank’s prior restructuring.
Profitability
Whether BPCE can sustain Novo Banco’s recent profitability, particularly given the relatively high acquisition price and the competitive landscape in the Portuguese banking sector, will be a key indicator of the deal’s success.
Regulatory Scrutiny
The transaction's size and the involvement of a major European banking group may draw increased regulatory scrutiny, potentially impacting Novo Banco’s future operations and expansion plans.
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