If you haven't heard, Avenue Capital's Marc Lasry will be representing you to our oldest and least-reliable ally. The White House didn't intend for you to hear that for a few weeks yet, and Avenue certainly didn't intend for its clients to hear it. But no convention of courtesy or deference can hold Bill Clinton down.
Dear Avenue Capital Investors,
Many of you have asked about the recent speculation in the media regarding Avenue. While we cannot comment on media speculation, I would like to provide you with a general update on the firm.
Since Marc and I founded Avenue almost 18 years ago, the firm has grown into a strong institution with more than 200 talented professionals globally. Having managed the firm for nearly two decades as President and Managing Partner, I could not be more proud of where Avenue is today. The Avenue team includes the best and brightest Portfolio Managers and investment teams, as well as a best-in-class institutional infrastructure extending across accounting, compliance, IT, risk management, business development, and legal departments.
Reflecting the increasingly global nature of the financial markets, we are pleased to announce that Richard Furst has been appointed the firm's Chief Investment Officer. In this position, Rich will provide high-level oversight of our investment strategies on a worldwide basis. As you know, Rich has served as the Senior Portfolio Manager of the Europe Strategy since its inception, and started with Avenue in 2004 as a Portfolio Manager for the U.S. Strategy. Rich will continue to dedicate his time predominantly to the leadership of the Europe Strategy, and, separately, in his role as Avenue's CIO, will spend a portion of his time providing high-level investment oversight globally. The Senior Portfolio Managers and Portfolio Managers leading each of our strategies will continue to be responsible for day-to-day investing and managing their independent investment teams within each of those strategies. None of this will change with Rich's appointment as CIO.
Avenue is performing well and is poised to continue to generate strong performance for its investors. As you know, several of our funds generated double-digit returns again in 2012, and importantly, the senior members of the Avenue team are invested meaningfully alongside you. We believe that the firm is extremely well positioned to continue to protect and grow investors' assets.
Avenue's global team remains completely focused on producing attractive, risk-adjusted returns for our investors and continuing to earn your trust and confidence. Please feel free to reach out to me, or any member of the Avenue team, if you have any questions.
President and Managing Partner
Reuters reads between those lines, and concludes that Lasry's exit won't have any effect at all at Avenue.
In the event Lasry does decamp from his Park Avenue office to the U.S. embassy on Avenue Gabriel in Paris, it appears Avenue Capital investors are unlikely to say bon voyage to the fund.
Officials with two institutional investors in Avenue Capital said that over the years Lasry has increasingly handed over the day-to-day management of the firm to his sister, Sonia Gardner. The brother and sister duo founded the hedge fund that specializes in distressed debt investment in 1995.
A representative for one of the institutional investors referred to Lasry being more like a "chairman" than a hands-on chief executive. The representative for the investor explained the most important thing is that the investing teams managed by 15 senior portfolio managers at Avenue Capital stay together and produce solid returns.
Oh yea, there's also this:
There's another reason investors may not pull money and that's because about 80 percent of Avenue's assets are locked up in private equity-like vehicles with more stringent redemption policies, according to a person familiar with the fund. Just 20 percent of the firm's assets can be withdrawn by investors either quarterly or annually.
Avenue prepares for life post-Lasry [Fortune]
Bill Clinton: Lasry Tapped for Ambassador to France [WSJ Washington Wire blog]
Avenue hedge fund names CIO as Lasry seen getting ambassadorship [Reuters]
If fund manager Lasry gets ambassador nod, investors likely to stay [Reuters]