In "Very Unusual" Move, Avenue Capital's Junk Bond Fund Stops Reporting Asset Levels
A month after we first noted the major redemptions at Avenue Capital Group's credit fund (note this is a different fund from Third Avenue), and just one trading day after CEO Marc Lasry strolled arrogantly on to CNBC and told the public that "I don't think it's a time to panic, I think it's actually a time where you've got opportunities out there," Morningstar reports the Avenue Credit Strategies Fund has failed to report asset levels since about mid-December.
As we noted first in mid-December...
What is just as surprising is that among its investments, Lasry does have a mutual fund, in fact two of them - the Avenue Credit Strategies Funds, an open- and close-ended fund, which as we first showed last Friday using the following Morningstar table, are not only among the worst performers year to date, but have tumbled by a whopping 9% in the past three months.
Fast forward to last night when according to Reuters, Avenue's founder, billionaire Marc Lasry, was forced on Monday to back the junk bond mutual fund hemorrhaging assets at his Avenue Capital Group "as jittery investors exit high-yield bonds amid a market rout."As a result, the size of the fund has been cut by more than half, sliding from $2 billion to just $884 million according to Lipper, roughly the same size where Third Avenue's own high yield fund was when it announced it would liquidate and gate investors.
Despite his defensive posture, Lasry hardly sounded too enthusiastic about the pace of outflows: "I think overall redemptions at some point are going to slow down across the market," Lasry said. "I'm not sure if that will be tomorrow or next week, but people are going to start putting money back into the market at some point."
And then just last Friday, CEO Lasry ventures on to CNBC to calm the panic and claim all is well as his fund was imploding...
...despite recent worries, Lasry struck a cautiously optimistic tone on the U.S. economy.
"I don't think we're going into a recession, I think it's whether we're growing at 1 or 2 percent," he said. "So the fact that you've got lower GDP, that's fine, but at the end of the day the U.S. economy is doing fine."
In fact, the hedge fund manager said, there are good openings for discerning investors.
"I don't think it's a time to panic, I think it's actually a time where you've got opportunities out there. Invest in solid companies and you'll end up doing pretty well," Lasry said.
The expert investor said he sees "a ton of opportunities" in the energy sector — but not in equities. Instead he said his firm is buying debt that sees a coupon of about 12 percent "while you're getting paid to wait."
He projected that, in the next two to five years, "you're either going to get paid off, or you'll end up owning these companies" as debt is converted into equity.
We were not the only one to notice Lasry's hypocrisy...
So Lasry - a big HY mutual fund holder - sees no big problem in HY market... Surprise!
— Tim Backshall (@credittrader) January 8, 2016
And now, as Reuters reports, in what is clear evidence of a run on his fund,
A junk bond fund run by billionaire Marc Lasry's Avenue Capital Management, which has experienced heavy investment losses and investor withdrawals, has stopped voluntarily reporting daily asset figures to the mutual fund industry's top two tracking firms.
Research chiefs for Morningstar and Lipper said on Monday they had not received daily asset under management figures from the Avenue Credit Strategies Fund since about mid-December. The fund is not required to report the figures, but not doing so is "very unusual," said Jeff Tjornehoj, head of Americas research for Lipper, a Thomson Reuters unit.
People familiar with the situation said outflows from the Avenue Capital fund had become a distraction after an unrelated junk bond fund in early December imploded. Junk bond investors already were on edge, pulling $3.6 billion from high-yield funds in November, according to Morningstar data.
The Avenue Credit Strategies Fund has lost about 40 percent of its $1.2 billion in assets since the end of October. The fund currently has about $650 million to $700 million in assets, with about 15 percent in cash holdings and less than 5 percent in illiquid investments, according to people familiar with the situation. Avenue Capital was not immediately available to comment.
And so another one bites the dust and the forced expulsion of assets into an already illqiuid market continues (unless, like Third Avenue, the SEC grants them exemption from providing liquidity to their clients - the moms-and-pops of America - who were forced by Fed repression into these risky assets, only to eat the losses on the way out)
The only question is whether Lasry, who is a close personal friend of the Clintons - recall Chelsea Clinton launched her "career' by working as an "analyst" at the very same Avenue Capital in the mid-2000s - and who was slated to become US ambassador to France until his ties to a shady poker ring were exposed in 2013, will use his executive privilege and request special treatment by the former, and soon future, first family.
If so, that will be the first case of a hedge fund bailout by the presidential family in history, and will make the political farce that are US capital markets even more comical.
(9 votes)
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Can we pull the plug on these guys (liars headed to a VERY hot place) and have our reset already? I think we've earned it by NOW. Why does government always have to move SO slowly? What does an IMF drawing right look like, anyway? Can't wait to start collecting a new series!!!
Nahhh...ya gotta give the CNBS anchors someone to lick all over during their hard hitting interviews and they GRILLED him.....BWAAAAAAAAAAAAAAAA
Common, a billionaire wouldn't lie, he's got a reputation to gaurd.
Stop worrying about the economy...
oh LOOK, there's a terrorist behind you!!!!
Chelsea got perfect SATs and was planning on going to medical school. Medicine is a calling, hedge fund analyst not so much.
Is it a "if you can't say something good, don't say anything at all" kind of thing?
They are probably only keeping quite to protect their investors. They wouldn't want to see some unfortunate "market action" take place based on silly little numbers would they? That just wouldn't be prudent.
...or a gold Chinese yuan!!!!
Translated:
"I don't think it's a time to panic." = "Time to panic long since passed."
getting honorable mention on ZH will be the nail in the coffin. Unfortunately, investors have been fleeced and he will remain a billionaire until the end...
It's always about leveraging "other people's money".
Theirs is always well cared for and would never be put at risk.
It's always about leveraging "other people's money".
Theirs is always well cared for and would never be put at risk.
......and ITS GONE!
https://www.youtube.com/watch?v=-DT7bX-B1Mg
Why do you sycophants have such a need to refer to criminals like this asshole as "billionaire" Marc Lasry every fucking time you write his name. It's almost as bad as CNBC calling every jerkoff a "legendary investor". Fuck off!
Well said! I've been wondering about that.
it's a Bloomberg advent
"Why do you sycophants have such a need to refer to criminals like this asshole as "billionaire" Marc Lasry every fucking time you write his name."
To remind the investing sheep where their wool went when they got fleeced?
You guys are doing way too much investigative journalism.
Agreed. I like my financial news fed to me as pre-digested pablum with Cliff's Notes attached telling me what conclusions to draw.
Can anyone explain game theory to us? What does a family (one on The List) in the bunker do when surrounded by The Mob? Do they willfully give back the money and live or die a smoky, choky death?
They die either way. If I'm one of the mob outside I hope they try to appease me by paying me off. Bonus nachos.
We came,we saw and she died.
Highly-Unusual ;-)
Boom
Here's a nugget on the plus side.
We'll see if she sings on where the bodies are hidden should it come to pass.
https://www.youtube.com/watch?v=uxyBY1leWmU
"No problem" AS HIS FUCKING WORLD IMPLODES!!! LOL
""No problem" AS HIS FUCKING WORLD IMPLODES!!! LOL"
View it from his perspective. Just like Corzine, when his world imploded, there is no pain when your skin is NOT in the game.
So, no problem - for him. You, the one invested in his funds? Not so much.
Someone realized that reporting the level of "Dogshit" might look bad.
From Avenue Capital's website regarding the above fund:
"An investment in the Avenue Credit Strategies Fund (the “Fund”) is not appropriate for all investors and is not intended to be a complete investment program. The Fund is designed as a long-term investment. Investing in the Fund involves risks, including the risk that you may receive little or no return on your investment or that you may lose part or even all of your investment. Please see the Disclosure section for an explanation of the Fund’s primary risks. There can be no assurance that the Fund will achieve its investment objectives."
Tis but a scratch!
Someone needs to do a DNA test on Chelsea. If she isn't the evil spawn of Hillary and Web Hubbell, I'll eat my hat.
That would make the campaign all that more interesting. An FBI prosecution of the Hildabeast would be the cherry on top.
It's too bad she's not the evil spawn of Bill and Webb.
Then she might have some brains.
But she might also have a problem leaving the other girls alone.
It's hard to find anything with positive EBITDA on that 2 and 20 farce of a chart. Is the Clinton Slush Fund gated yet?
we're going to see a lot more fingers in the dike as time goes by.
There is something about Chelsea Clinton that is a little off...she's not quite right.
I have seen her up close in person.
.....Trust me: you don't want to.
You stalker.
I disagree....
it is CERTAINLY TIME TO PANIC!!!
"at the end of the day..." = I've got nothing to back up my argument so just fuck off. Weak.
seriously... I'm anal retentive, when it comes to research.
Look at the list of companies on the Clinton Foundation profile.
Then I mentioned XLF> Financial ETF last Thursday.
Where's financials, bioteck "fliking eyelids" Biogen CEO?
It's pretty obvious that additional cash injections aren't the answer.
Pail Krugtard on " Meet The Blowhards" on Sunday, wearing 15 less pounds, sealed the deal.
Marc and the Clintons are JUNK.
Marc and the Clintons are JUNK.
... meanwhile, over @ Katz's Deli on Houston .... David says, "We got a problem - them ZeroHedge folks are talkin' bout downgrading Marc Lasry & the Clinton Syndicate to Junk grade. Get Sol, Simon and Goldslinger on it right now" .... " And no funny business, just a kneecap or two.... shut them Goy Filth up now !"
/s
LOVE the FED !
Translation: You peons remain calm and leave your money alone until I get my shit squared away and cash out
Is there any difference between WS and the political families?
Swindling goes on............and then the idiots going to be puzzled how come they lost their pensions.