Key Takeaways
- • Avenue Capital Group, a $9.4 billion asset manager led by Marc Lasry, is launching its first dedicated impact credit fund targeting approximately $500 million in capital raise during 2018.
- • The fund will focus primarily on debt investments with select equity allocations to North American companies in sustainability-linked sectors including renewable energy, affordable housing, water, agriculture, energy efficiency, and infrastructure resiliency.
- • John Larkin, a senior managing director at Avenue, will head the impact investment initiative, supported by recently hired deputies Rhys Marsh (formerly CIT Group) and Thomas "Jamie" Devine (formerly J.H. Whitney Investment Management).
- • Impact credit funds remain scarce within the hedge fund and alternative investment space, though institutional demand is accelerating—with recent market entrants including JANA Partners and ValueAct Capital Management establishing competitive positioning.
- • The fund targets mid-sized North American companies with loan tickets between $20 million and $75 million, positioning an expected annual return target in the mid-teens percentage range.
Summary
Avenue Capital Group, the New York-based specialty lending firm with $9.4 billion in assets under management, plans to enter the impact investment sector this year with a dedicated fund focused on credit investments with social and environmental objectives. Led by billionaire founder Marc Lasry, Avenue is seeking to raise approximately $500 million for the initiative, marking the firm's first formal foray into impact-oriented investing despite its established reputation for distressed debt strategies across global markets.
The Avenue impact credit fund will deploy capital primarily through debt instruments with supplementary equity positions targeting North American mid-market companies. Investment theses will concentrate on sectors aligned with sustainable development objectives: renewable energy, energy efficiency and storage, affordable housing, agriculture, water management, and infrastructure resiliency. The fund intends to provide financing through loan tickets ranging from $20 million to $75 million, with an expected annual return target in the mid-teens percentage range.
John Larkin, elevated to senior managing director and newly designated head of impact investments, will lead the strategy. Two recent hires will support the initiative: Rhys Marsh, recruited from CIT Group, and Thomas "Jamie" Devine, departing from J.H. Whitney Investment Management. This staffing structure indicates Avenue's commitment to developing specialized expertise in impact credit rather than retrofitting the strategy within existing investment teams.
The launch reflects broader institutional demand for impact-focused alternative investments, though such funds remain relatively uncommon within the hedge fund ecosystem. Recent market entrants—notably activist hedge fund JANA Partners and ValueAct Capital Management—have similarly begun establishing impact-oriented allocations, signaling emerging competitive positioning within alternative asset management. Avenue's entry underscores growing institutional investor appetite for investment vehicles combining financial return objectives with measurable social and environmental outcomes, a trend gaining traction across family offices and institutional portfolios.
The Avenue impact credit fund will deploy capital primarily through debt instruments with supplementary equity positions targeting North American mid-market companies. Investment theses will concentrate on sectors aligned with sustainable development objectives: renewable energy, energy efficiency and storage, affordable housing, agriculture, water management, and infrastructure resiliency. The fund intends to provide financing through loan tickets ranging from $20 million to $75 million, with an expected annual return target in the mid-teens percentage range.
John Larkin, elevated to senior managing director and newly designated head of impact investments, will lead the strategy. Two recent hires will support the initiative: Rhys Marsh, recruited from CIT Group, and Thomas "Jamie" Devine, departing from J.H. Whitney Investment Management. This staffing structure indicates Avenue's commitment to developing specialized expertise in impact credit rather than retrofitting the strategy within existing investment teams.
The launch reflects broader institutional demand for impact-focused alternative investments, though such funds remain relatively uncommon within the hedge fund ecosystem. Recent market entrants—notably activist hedge fund JANA Partners and ValueAct Capital Management—have similarly begun establishing impact-oriented allocations, signaling emerging competitive positioning within alternative asset management. Avenue's entry underscores growing institutional investor appetite for investment vehicles combining financial return objectives with measurable social and environmental outcomes, a trend gaining traction across family offices and institutional portfolios.
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