Marc Lasry Avenue Capital Group is closing it’s original hedge fund Avenue Investments.
Avenue Capital Group is closing its original hedge fund, Avenue Investments, as it moves increasingly toward less liquid private equity-style investment vehicles.
The hedge fund will liquidate positions and return investor capital as soon as market conditions allow, according to a CNBC article.
A spokesperson for the firm confirmed the winding down of the fund.
Amid a negative performance and a shift to funds with longer-term investor commitments, the distressed-investing firm Avenue Capital Group is closing its original hedge fund, Avenue Investments, and returning money to the fund’s investors.
The majority of Avenue’s capital in the distressed investment space is reportedly allocated into investment vehicles with lockup provisions ranging from five to seven years, which represents the principal direction of the company.
Avenue Investments manages approximately $350 million, a small portion of the more than $13 billion managed by Avenue overall. Nonetheless, the fund was Avenue’s first alternative investment vehicle when it was launched in 1995 by Marc Lasry and Sonia Gardner with initial capital of just $7 million.
However, distressed investing can often take a more private equity form, as corporate turnarounds take time to come to fruition and often involve illiquid securities, meaning it is not rare to see investors in distressed funds agree to lockups as long as five or more years. Investors increasingly want hedge fund structures to mitigate liquidity mismatches and often push for fee and redemption concessions as a result.
Avenue Capital was founded in 1995 by Lasry and Gardner, who are siblings. Morgan Stanley bought a stake in the firm in 2006 for about $300 million