Avenue Capital Raising Up To $1.25B For New Energy Fund

May 5 2015 | 10:45am ET

Avenue Capital has raised approximately $700 million towards a $1.25 billion cap for a new fund that will invest in energy-related opportunities.

The Avenue Energy Opportunities Fund L.P. will buy positions in distressed and stressed companies in the North American energy and utilities sectors, according to a Reuters report citing an unnamed source. 

The new fund is one of several to be formed following the severe decline in energy prices over the past year, according to a Reuters report. Many investors believe the securities of otherwise strong companies have been caught in the downdraft, presenting an opportunity for nimble and well-capitalized investors. 

Meanwhile, Avenue will close its $500 million hedge fund Avenue International, which launched in July 1997 and has returned an average net 7.35 percent per year but lost 0.42 percent in 2014. 

New York-based Avenue manages approximately $13 billion, of which $2 billion is in funds considered to be liquid and the remainder subject to portfolio lockups that can be as long as five years. 

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