Marc Lasry, managing partner of Avenue Capital Group, is in the process of raising capital for a new distressed debt fund Avenue Special Situations Fund III. The firm has raised approximately $600 million in commitments and is looking to raise an additional $150-200 million in the next three months, Lasry said. Avenue Capital also will be hiring additional analysts to support the new fund.
Avenue Special Situations Fund III will commit 40% of its capital to senior secured bank debt, 40% to senior notes and 20% to trade claims. The investments will be geared toward a number of opportunistic industries, Lasry said, explaining that energy, cable and other sectors hurt by the economy could be on the list of possible candidates. The fund is aiming for a 20% net return for investors.
The new vehicle joins two other funds Avenue Special Situations Fund (1998) and Avenue Special Situations Fund II (2000) that will total a firmwide investment of roughly $1.5 billion in the U.S. distressed debt market. The two existing funds are fully invested.
Sponsorship for Avenue Capital was provided by Texas Pacific Group, which has helped the firm to raise capital. Lasry said the Texas Pacific Group was chosen to aid the group because of a prior relationship. The firm also has three funds representing $800 million geared towards the Asian distressed debt market.