market folly

Marc Lasry, co-founder of Avenue Capital appeared today on Bloomberg TV where he said he thinks there's a huge amount of distressed debt investing opportunities in Europe.  He also argued that Europe would not blow up.

His firm manages just under $13 billion and this is the second time we've seen him appear to talk about the opportunities in distressed debt.


Here are some select excerpts from his interview we found intriguing:

On investing in Europe:  "The great thing about Europe today is you've got a huge amount of supply and very little demand. So you're not really bumping into everybody. I think that’ll change over time."

Which is the better opportunity: US or Europe?  "I think in Europe today, you're getting overpaid for the risk. For us, we can buy senior debt in Europe for around 50 cents, 60 cents and here in the U.S. you're paying 70 cents or 80 cents for it. The question is, where do you want to be investing? A lot of it goes to, if you look at investing today, the risk-free rate is 20 basis points, so where are you getting paid to take the risk? For us to make 15% to 20%, we think we can do it in Europe a lot easier than here."

How Avenue's been investing:  "We have been investing the capital about 5% a month. The reason for that if we think over the next year or year and a half, there's a huge amount of opportunities and the question is, is the better time to invest three months ago or three months from now? Our view is to invest over time. And we think we'll just average in the prices."

Is Lasry worried about Europe short-term? "It matters but our long-term view is over the course of the next two or three years, everything is going to work itself out, and whether it's George Soros or it's somebody else, which you constantly keep hearing every week and every month that Europe has problems. We all know that. I think it'll work out. If you believe that and you invest, you'll do well."


Embedded below is Marc Lasry's full interview with Bloomberg TV:




For more on this investor, Marc Lasry is profiled/interviewed in the new book The Alpha Masters which is definitely worth reading.