Avenue Readies Listed Credit Hedge Fund

Oct 20 2010 | 3:08am ET

Avenue Capital Group is set to launch a listed high-yield debt hedge fund.

The Avenue Income Credit Strategies Fund will invest most of its assets—at least 80%—in a variety of high-yield products, including leveraged loans and collateralized debt obligations. The fund may also invest in credit default swaps and currency derivatives, among other asset classes, Avenue said in a regulatory filing.

In its preliminary prospectus, Avenue wrote that it "believes that the changing investment environments over time offer attractive investment opportunities in the markets for credit obligations."

"To both capitalize on attractive investments and effectively manage potential risk, the Fund believes that the combination of thorough and continuous credit analysis, diversification of holdings and the ability to reallocate investments among different categories of investments at different points in the credit cycle is critical to achieving higher risk-adjusted returns, including high current income and/or capital appreciation, relative to other high-yielding investments," the prospectus reads. "The Fund expects to emphasize high current income and capital appreciation by investing generally in Senior Loans and in second lien or other subordinated loans or debt, including stressed securities and derivatives."

Most of the details about the new fund remain unclear. Avenue did not specify where it plans to list the fund, which firms will be its service providers or what fees it plans to charge. It did say it would sell the shares for $20 apiece, and that it expects to launch it next year.

Avenue's plans were first reported by Bloomberg News.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.