Exclusive: Avenue launches third European special sits fund

The US firm has so far collected $1.2 billion for a first close of its Avenue Europe Special Situations Fund III and plans to raise over $2 billion in total.  

Avenue Capital Group collected $1.2 billion for a first close on Avenue Europe Special Situations Fund III, according to a source familiar with the matter. The New York-headquartered alternative investment firm plans to raise over $2 billion for the strategy overall and reached the first close yesterday (4 June).

The US-based firm declined to comment.

The firm closed Avenue Capital Special Situations Fund II on about $2.8 billion in July 2012, exceeding its $2.5 billion target. The strategy was set up to invest in distressed companies impacted by the European credit crunch and downturn.  It focused on senior secured debt instruments into companies in Northern Europe, including the UK, Germany, Ireland, Belgium and the Netherlands, as well as some Scandinavian countries.

Limited partners in the second fund included the Arizona State Retirement System, the Colorado Public Employees’ Retirement Association, the Los Angeles City Employees Retirement System, the Los Angeles County Employees Retirement Association, the Massachusetts Pension Reserves Investment Management Board and the New York State Common Retirement Fund, among others, according to PDI Research & Analytics.

Avenue had raised $1.2 billion for its first fund in this series in 2008. It also runs US and Asian counterparts to this strategy. Marc Lasry (pictured) and Sonia Gardner, the firm’s co-founders lead Avenue and are based in New York. Avenue has $13.3 billion in assets under management across private equity, private debt and hedge fund strategies. In addition to its New York headquarters, the firm has offices in London, Beijing, Hong Kong, Luxembourg, Madrid, Milan, Munich, New Delhi and Singapore.