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Starwood sells minority stake to Dyal

The subsidiary of Neuberger Berman made a permanent capital investment in the Greenwich, Connecticut-based private equity real estate firm.

Starwood Capital Group has sold a passive, non-voting minority stake to Dyal Capital Partners, the firms said earlier this week.

The terms of the transaction were not disclosed, and both firms declined to comment. Starwood will use part of the proceeds to “fund its strategic growth initiatives worldwide,” according to Wednesday’s statement.

Starwood has over $53 billion in assets under management, with funds spanning global real estate, energy infrastructure and oil and gas. The firm is currently marketing its eleventh opportunistic real estate fund, Starwood Global Opportunity Fund XI, with a target of up to $6 billion, PERE previously reported. With capital from the vehicle, Starwood plans to invest in 50 to 60 transactions and is targeting a net internal rate of return of 14 percent to 16 percent.

Dyal is a subsidiary of New York-based investment firm Neuberger Berman, which buys minority equity stakes in institutional alternative asset management firms. Dyal makes permanent capital investments, meaning it is not required to sell assets and distribute the returns within a set period of time.

Last month, Dyal acquired a passive non-voting stake of less than 15 percent in HIG Capital, a private equity firm that also has real estate funds, PERE’s sister publication, Private Equity International, reported. Dyal’s investment in HIG will mostly be used to boost HIG's investments in its own funds, and to finance a number of growth initiatives in the small and mid-cap market, HIG said.

Evercore served as financial advisor and Kirkland & Ellis served as legal advisor to Starwood. Both advisors declined to comment.