By Svea Herbst-Bayliss
BOSTON (Reuters) – Hedge fund powerhouse Avenue Capital Group, which oversees $13 billion in assets, has raised some $700 million in new money for an energy oriented portfolio that it plans to cap at $1.25 billion by the end of next month, a source familiar with the firm said.
Avenue is one of a handful of hedge funds that have seized on the sharp drop in oil prices to start new portfolios, convinced that there are strong companies that have been oversold. The Avenue Energy Opportunities Fund L.P. plans to invest in distressed and stressed companies in the energy and utilities sector in North America, the source said.
At the same time, the firm – run by brother and sister team Marc Lasry and Sonia Gardner – plans to shut down a $500 million hedge fund portfolio, Avenue International, where investors can withdraw their money on a quarterly basis. The fund, launched in July 1997, makes up less than 5 percent of the firm’s total assets. It has returned an average net 7.35 percent per year but lost 0.42 percent in 2014.
Avenue has roughly $2 billion in very liquid funds, including mutual funds, and roughly $11 billion in portfolios that are locked up as long as five years.
A spokesman for the firm declined to comment.
(Reporting by Svea Herbst-Bayliss; Editing by Richard Valdmanis, Bernard Orr)