MSIM Takes 18% Stake In Hedge Fund

Oct 30 2006 | 10:59am ET

Morgan Stanley Investment Management has bought a minority stake in New York-based hedge fund Avenue Capital Group. MSIM will reportedly pay $280 million for 18% of Avenue.

Under the arrangement with MSIM, Avenue will remain an independent firm and continue to be led by its current management team, which includes founder Marc Lasry, formerly a manager at Amroc Investments and Acadia Partners.

MSIM is just the latest in a series of large investment banks to beef up their asset management units through acquisitions of hedge fund firms.

Earlier this month, Merrill Lynch took a small stake in alternative asset manager DiMaio Ahmad Capital, which manages approximately $2 billion.

While the trend for big name banks to take ownership positions in hedge fund firms continues, some experts say that investors are paying the price. Speaking on a panel at the MARHedge Conference in Bermuda last week, one portfolio manager who runs a $1.3 billion family office said that this type of deal, “is wonderful for the hedge funds, but bad for
the investors.”

Avenue Capital, which specializes in buying distressed debt, has approximately $12 billion in assets under management.


In Depth

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note