Avenue Capital Group LLC, the distressed-debt firm co-founded by billionaire Marc Lasry, has closed its second European fund at $2.78 billion to invest in companies hurt by the region’s sovereign-debt crisis, according to a person familiar with the situation.
The firm in May exceeded its $2.5 billion goal for Avenue Europe Special Situations Fund II, a little more than one year after starting to raise money, said the person, who asked not to be identified because the fund is private. Kathleen Deveny, a spokeswoman for the New York-based firm, declined to comment.
Apollo Global Management LLC and Davidson Kempner Capital Management LLC are among firms targeting distressed debt in Europe to take advantage of deals arising from the region’s crisis. Lasry said in a Bloomberg Television interview last month that he doesn’t expect Europe to “blow up” and that he sees a plenty of distressed debt investing opportunities there.
The new fund will make investments in northern European countries, including the U.K., Germany, Ireland, Belgium and the Netherlands as well as Scandinavian nations, the firm said in marketing materials sent in April 2011. The fund will mainly buy senior secured debt, equities or other financial obligations of companies in financial difficulty.
The firm offered investors the choice between investing in a euro-denominated vehicle and dollar-denominated fund, according to the marketing materials. The prior fund, Avenue Europe Special Situations Fund LP, was euro-denominated.
Avenue raised 1 billion euros ($1.2 billion) in 2008 for the predecessor fund, which was generating a 1.4 times multiple and 11.6 percent internal rate of return as of Dec. 31, according to the California Public Employees’ Retirement System, which has invested in the vehicle.
Lasry and his sister, Sonia Gardner, founded Avenue Capital in 1995. The firm, which invests in distressed and undervalued debt and equity in the U.S., Asia and Europe, managed about $12.5 billion in assets as of June 30, according to its website.