The Avenue Europe Special Situations Fund II seeks to take advantage of opportunities fueled by Europe’s leveraged corporate debt market and the region’s sovereign-debt crisis, the New York-based firm said in marketing materials issued in April. The fund will be capped at $2.5 billion, according to a person familiar with the matter, who asked not to be identified because the information is private.
Avenue Capital is among a number of firms looking to invest in distressed European debt. Apollo Global Management LLC (APO), the New York-based private-equity firm run by Leon Black, has been marketing a fund to purchase nonperforming loans in Europe. Davidson Kempner Capital Management LLC, the New York-based hedge fund, is raising its first private-equity fund focused on distressed investments.
Kathleen Deveny, a spokeswoman for Avenue Capital, declined to comment on fundraising.
The new fund, which will be managed by the firm’s London- based unit, will target northern European countries, including the U.K., Germany, Ireland, Belgium and the Netherlands, as well as Scandinavian nations, according to the marketing documents. It will invest primarily in senior secured debt, equities or other financial obligations of companies in financial difficulty.
The fund had its fourth closing on Dec. 22, according to the investor update, a copy of which was obtained by Bloomberg News. The smallest check investors can write to the fund is 10 million euros ($12.78 million), according to the marketing materials. The term is five years, with as many as two one-year extensions.
Avenue Capital’s first European distressed fund raised 1 billion euros in 2008. It was generating an 18.3 percent internal rate of return and a 1.6 times multiple of the acquisition cost as of June 30, according to performance data from the California Public Employees’ Retirement System, an investor in the fund.
Lasry and his sister, Sonia Gardner, formed Avenue Capital in 1995. The firm, which managed about $12.1 billion as of Nov. 30, invests in distressed and undervalued debt and equity in the U.S., Asia and Europe, according to its website. The firm’s European team managed about $3.3 billion as of that date.
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