| Marc Lasry of Avenue Capital (Bloomberg) |
Marc Lasry is on a fundraising binge.
His New York-based hedge fund firm, Avenue Capital, is currently passing the hat for a new fund that will invest in Europe. It has completed its first close on $1.1 billion and hopes to eventually raise as much as 2.5 billion for its Europe Special Situations Fund III, according to a knowledgeable source.
The new fund is similar to two earlier iterations. It has a drawdown structure and will focus on distressed debt in Europe.
Lasry is said to believe there are plenty of good opportunities for distressed situations even if current central bank easing stimulates the European economy.
In addition, Avenue has closed on $800 million of an anticipated $1.35 billion for The Avenue Energy Opportunities Fund, which will invest in distressed North American energy and utilities companies, according to a knowledgeable source.
The firm expects to close on the rest of the money in the next 30 days, according to the source.
More than most alternative investment firms, Avenue has blurred the line between hedge and private equity funds. For example, under a drawdown structure, Avenue does not take possession of investors’ committed capital until it actually makes an investment, similar to the way private equity firms operate.
Altogether, Avenue, which Lasry founded in 1995 with his sister, attorney Sonia Gardner, has $13.3 billion under management.
Avenue is not the only firm gearing up for potentially lucrative distressed opportunities in Europe.
We recently reported that New York-based Marathon Asset Management, a credit and debt specialist, is loading up on nonperforming loans from European banks secured by hard assets. Co-founder Bruce Richards recently said many of them are selling for 40 cents to 60 cents on the dollar.
Marathon has raised funds for this investment play and is prepared to invest billions of dollars in it.
In April we reported that York Capital Management had raised some $500 million for its new fund, York European Distressed Credit Fund II.
We also recently reported that Centerbridge Partners has opened up its hedge funds to new capital for the first time in several years. The New York distressed-debt specialist has told investors it wants to prepare for when opportunities open up, in the belief that when they do, they will be large and attractive. Centerbridge is not targeting a specific industry or region, however.
Meanwhile, Lasry, the sports mogul, also received good news last week.
Wisconsin governor Scott Walker announced that taxpayers will pay about half the bill for a new $500 million arena for the Milwaukee Bucks professional basketball team, which Lasry and Wesley Edens, a founder and co-chairman of Fortress Investment Group, acquired last year for $550 million. The pair, along with former owner and former U.S. Senator Herb Kohl, have agreed to finance the other half.
Under the deal, the team will shoulder maintenance and operating costs for the arena and will receive the revenue from naming rights, which could be lucrative.
There is a degree of irony here. Walker, a Republican expected to announce his candidacy for president and a self-described fiscal conservative, pushed hard for taxpayers to finance the new arena owned by billionaires. If he hadn’t, there was a good chance the National Basketball Association would have bought the team and moved it to another city.
For his part, Lasry has long been a big supporter of — and fundraiser for — Bill and Hillary Clinton and Democrats in general.
It’s not inconceivable that Walker and Hillary Clinton could wind up squaring off for the presidency.
