Starwood Capital Group Closes Two Funds at a Combined $2.8 Billion

Fund Closures Bring Total Capital Raised by Starwood Over the Last 15 Months to More than $4.4 Billion

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Apr 02, 2010, 08:30 ET

GREENWICH, Conn., April 2 /PRNewswire/ -- Starwood Capital Group ("Starwood"), a leading private investment firm, today announced the successful close of an aggregate $2.8 billion for its two newest funds: Starwood Global Opportunity Fund VIII ("SOF VIII") at over $1.8 billion and Starwood Capital Global Hospitality Fund II ("Hotel II") at $965 million. SOF VIII is the largest fund ever raised by Starwood in its 19-year history and is a strong sign of confidence among its investors about the firm's continued ability to capitalize on emerging trends in the global real estate industry.

The closing of the funds brings Starwood's total capital raised since January 2009 to more than $4.4 billion, including the successful closing of Starwood's Debt Fund II, the public offering of Starwood Property Trust (NYSE: STWD) and a co-invest pool of capital raised for the Starwood-led consortium's acquisition of the Corus Bank assets from the FDIC.

"We are very pleased to have raised more than $4.4 billion of capital over the past 15 months," said Barry Sternlicht, Chairman and Chief Executive Officer of Starwood Capital Group. "We believe this is a testament to our experienced and disciplined team that has been together for more than a decade. Our conservative investment discipline led us to dramatically decrease our investment pace between 2005 and 2008 as the markets became overheated. In 2009, however, we returned to the markets aggressively and have since invested nearly $1.5 billion of total equity capital across all of our investment vehicles. For example, Starwood recently led the acquisition of the $4.5 billion loan portfolio of the failed Corus Bank in partnership with the FDIC. In addition, we acquired more than 5,000 residential lots from the bankrupt, formerly public homebuilder TOUSA for approximately $81 million in cash."

"The combination of these two new funds, in addition to Starwood Property Trust, provides Starwood with a significant pool of capital from which we can originate real estate loans, acquire performing and nonperforming loans and acquire ownership of real estate across virtually all asset classes throughout the world," added Jerome C. Silvey, EVP and Chief Financial Officer.

Starwood today manages approximately $16 billion of assets across three businesses, with a primary focus on its private real estate funds. Starwood is also an active player in the energy space through Starwood Energy Group ("SEG"), which focuses on transmission, power generation, solar and other renewable projects. SEG is currently building Canada's largest solar facility and owns power plants in California and Colorado. SEG also co-sponsored the development and operation of the Neptune Cable, which runs beneath the Atlantic Ocean between New Jersey and Long Island. In addition to SEG, Starwood sponsors Starwood Real Estate Securities ("SRES"), a long-short global real estate securities hedge fund. SRES has substantially outperformed the S&P 500, Russell 2000 and MSCI US REIT Index during its 5-year history.

About Starwood Capital Group

Starwood Capital Group is a private U.S. based investment firm with a core focus on global real estate. Since the group's inception in 1991, the Firm, through its various funds, has invested in more than $24 billion in assets. Starwood employs approximately 150 people across 9 offices including Greenwich, San Francisco, Washington, D.C., Atlanta, London, Paris, Luxembourg, Mumbai and Tokyo. Starwood has invested in nearly every class of real estate on a global basis, including office, retail, multifamily, industrial, residential land, hotels, resorts, golf and senior housing assets. Starwood and its affiliates have successfully executed an investment strategy that includes building enterprises around core real estate portfolios in both the private and public markets and were responsible for the creation of Starwood Hotels & Resorts Worldwide and iStar Financial. The Firm's philosophy has always been the same: treat investor capital as its own and invest in every transaction the Firm sources. Moreover, Starwood aligns its interests with those of its investor partners. Starwood also performs nearly every major function of real estate in-house to enhance accountability for its results.