Marc Lasry, the billionaire co-founder of Avenue Capital Group LLC, said banks will have a “difficult time” in the next five years.
“I think it will be very hard. If you look back, the reason banks made a lot of money is because they used a lot of leverage and now that they can’t use the leverage, they will not be able to make enough money,” he said today in an interview with Stephanie Ruhle and Erik Schatzker on Bloomberg Television’s “Market Makers.”
Banks are struggling to lift profit amid stricter capital requirements and as new rules force them to dismantle their proprietary trading desks. Lasry, 52, said boutique banks will have an “easier time” getting started and competing with the big banks.
Lasry, whose firm is based in New York, reiterated that he sees a “huge amount” of distressed debt investing opportunities in Europe. While buying equity there is risky, senior debt protects from losses, he said.
“In Europe, you’re getting overpaid for the risk,” Lasry said. “I don’t think Europe will blow up and that over time things will work out.”
In the U.S., Lasry said he likes energy and that there will be good companies to buy at low prices after natural gas prices fell to a 10-year intraday low in April.