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Avenue Capital Management II
Avenue Capital Management II, L.P. was formed in 2008 as a core distressed-debt and special-situations fund within the broader Avenue Capital Group, which...
Avenue Capital Management II
Avenue Capital Management II, L.P. was formed in 2008 as a core distressed-debt and special-situations fund within the broader Avenue Capital Group, which Lasry and Gardner co-founded in 1995. The firm cut its teeth buying the bank debt of bankrupt industrial companies in the 1990s before scaling into one of the largest dedicated distressed-credit platforms globally. Lasry, a former bankruptcy lawyer, and Gardner, a former attorney who ran Robert M. Bass's distressed investments, built the firm on the principle that mispriced risk in corporate and sovereign debt creates the best entry points. The firm focuses on distressed debt, special situations, private credit, and opportunistic real estate — spanning corporate loans, trade claims, and structured equity in North America and Europe. Avenue's strategy centers on purchasing debt at deep discounts from forced sellers, then working through restructurings to capture the recovery upside. The flagship vehicle has deployed capital into energy sector turnarounds, post-recession real estate loan portfolios, and sovereign debt, including a multi-year, concentrated position in Puerto Rico debt that became a public flashpoint after Hurricane Maria. Other known positions have included investments in European non-performing loan pools and U.S. media company restructurings. Total firm-wide assets under management were last publicly reported at approximately $9.5 billion (per Bloomberg, 2019), though the specific allocation to Avenue Capital Management II is not disclosed. The firm operates from its New York headquarters with additional offices historically maintained in London and across Asia. In March 2023, Marc Lasry sold his ownership stake in the NBA's Milwaukee Bucks to focus full-time on Avenue Capital after a nine-year run as co-owner, signaling a renewed concentration on the investment platform (per ESPN, March 2023). Avenue's structural differentiator is its hybrid operating model — a $9.5 billion-plus distressed platform that has operated more like a merchant bank in certain cycles, directly advising on restructurings where it holds concentrated positions. Lasry's personal network across sovereign governments, distressed energy companies, and professional sports ownership has historically provided sourcing channels that traditional private-credit funds cannot replicate. The firm's willingness to take concentrated, headline-grabbing positions in sovereign stress — like Puerto Rico — separates it from peers who prefer diversified subordinated lending.
General information
Firm type
Asset Manager
Year founded
2008
AUM
Undisclosed
Location
Region
North America
Country
United States
City
New York
Corporate office
New York, NY, United States
Principals
Marc Lasry
Co-Founder, Chairman and Chief Executive Officer
Sonia Gardner
Co-Founder, President and Managing Partner
Sector focus
Frequently asked questions
Who runs investment decisions at Avenue Capital Management II?
Marc Lasry, co-founder and CEO, and Sonia Gardner, co-founder and President, jointly oversee the platform. Lasry focuses on sourcing and large distressed-debt theses, while Gardner manages the firm's day-to-day investment operations, a structure that has been in place since the firm's 1995 founding.
How does Avenue source distressed-debt opportunities?
The firm sources through two primary channels: direct relationships with selling banks and forced sellers in bankruptcy proceedings, and Lasry's extensive network across sovereign governments and distressed corporates. Avenue's reputation as a buyer of complex, out-of-favor debt pools — including European non-performing loans and Puerto Rico government bonds — brings deal flow from institutions seeking rapid portfolio de-risking.
Is Avenue Capital Management II a single-family office or an asset manager?
It is a private investment partnership structured as an asset manager. Unlike a single-family office, Avenue pools third-party institutional capital alongside partner commitments. The firm was founded by Lasry and Gardner, who did not originate from a single-family wealth source but from distressed-debt investing roles at other firms.
What is Avenue's known posture on co-investments alongside external GPs?
Avenue typically acts as the lead or controlling investor in its distressed positions rather than a co-investor alongside other GPs. In larger sovereign or energy restructurings, the firm has accepted co-investment capital on a deal-specific basis, but its model centers on proprietary sourcing and concentrated position-building rather than passive club deals.
What was the controversy around Avenue's Puerto Rico investment?
Avenue held a $1.5 billion position in Puerto Rican government debt, becoming one of the island's largest creditors ahead of its 2017 bankruptcy. The position drew public criticism after Hurricane Maria when protesters demanded debt relief, and it became a central case study in the ethics of distressed sovereign-debt investing. Lasry publicly defended the investment, arguing the firm engaged in good-faith restructuring negotiations (per the Financial Times, 2018).
Which sectors does Avenue explicitly avoid?
Avenue has historically avoided venture-stage and growth-equity technology investments, which lack the distressed entry price and restructurable balance sheets its underwriting requires. The firm's energy exposure has been limited to post-distress entry points rather than exploration-stage or speculative drilling positions.
How does Avenue Capital Management II differ from Avenue Capital Group?
Avenue Capital Management II is a specific vehicle within the broader Avenue Capital Group platform, formed in 2008 as a distressed-debt and special-situations fund. Avenue Capital Group encompasses multiple vehicles including U.S. and Europe-focused distressed funds, a real estate arm, and historically an Asia special-situations fund. The management company and investment committee are shared across strategies.
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