The Avenue Capital Group, the hedge fund run by Marc Lasry, is increasing its bet on Europe.
The firm is in the process of raising a $500 million fund to invest in distressed European assets, according to a person familiar with the matter. The new pool of capital, along with the $2.78 billion raised last year for another European-focused fund, signals Avenue’s continued belief in a long-term recovery for the region.
Europe has started to look more attractive in recent months, following bold moves by the European Central Bank last year that have helped lower borrowing costs for governments. At the same time, banks are under pressure from regulators to offload assets, creating possible opportunities for investors.
Avenue Capital, which is based in New York with offices in London and Munich, ha about $3.9 billion allocated to European investments at the end of last year, according to the firm’s Web site. The European strategy, overseen by Richard P. Furst, a senior portfolio manager, includes investments in distressed debt and other securities considered undervalued. The new fund in particular will focus on private equity and direct lending in Europe, the person familiar with the matter said.
Avenue is making a “three- to five-year bet†on Europe, Mr. Lasry said in an interview with The New York Times in July. Overall, Avenue had about $12 billion under management at the end of last year.
While European economies still face significant challenges, market experts are seeing signs of impr! ovement. At the World Economic Forum in Davos, Switzerland, last month, Mario Draghi, the president of the European Central Bank, said he expected “positive contagion†to lift financial markets.
In a podcast released on Monday, William E. Conway Jr., co-chief executive of the Carlyle Group, also expressed optimism. “Our data right now is telling us the European economy in generalhas begun to bottom,†he said.
A spokesman for Avenue, Todd Fogarty, declined to comment.
