Avenue restarts Asia strategy – exclusive

Marc Lasry and Sonia Gardner’s Avenue Capital Group has launched its fifth Asia special situations fund, a platform that hasn’t raised new capital since 2006.

Avenue Capital Group, the US alternative investment firm, has started fundraising for its Avenue Asia Special Situations Fund V. The firm hasn’t been in the market with this strategy since 2006. Sources tell PDI the fifth fund is expected to hold a first close in the summer, though a specific target hasn’t yet been revealed.

An Avenue spokesman declined to comment.

The previous fourth fund gathered $3.1 billion ten years ago. Though Avenue decided to cut the capital available to $2.7 billion in 2009 as the firm was seeing less distressed opportunities in the region, according to The Wall Street Journal at the time. Since then, Avenue was waiting for more fruitful distressed opportunities in Asia, which now appear to be emerging. 

Other large alternative investment firms, including TPG and KKR, are particularly bullish on India, where banks needs to clean up their balance sheets and could have large chunks of non-performing loans to sell at discounts to alternative lenders. An economic slowdown in China has also led to a fair amount of restructurings and bankruptcies in the country recently. 

As Avenue’s Asia business has been relatively dormant, the firm had seen some departures and layoffs in the region in the past few years. Though Avenue recently began rebuilding the platform ahead of the fund launch.

Anil Gorthy and Dan Galanter joined Avenue as senior managing directors to lead the Avenue Asia strategy in December 2014. Gorthy is the senior portfolio manager for the strategy. He previously held a similar role at PAG, an Asia-focused alternative investment firm. Galanter, who also worked at PAG, focuses on business development, strategy and management for Avenue Asia. 

The firm also appointed regional heads in recent months. William Chung is the country manager for Hong Kong and Singapore. Yifeng Wang is the country manager for China and George Wang oversees Australia and New Zealand.

Avenue Capital is headquartered in New York. It was founded in 1995 by Marc Lasry and Sonia Gardner, who are siblings. The duo opted to shut down the original hedge fund that they founded the business with last year, choosing to focus on private equity-style strategies in the future. The firm runs US and European special situations funds and has $11.8 billion in assets under management.