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Avenue Capital to launch 'impact' investment fund, source says

Reported by Reuters
Apr 18, 2018· 2 min read
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Key Takeaways
  • • Avenue Capital is set to launch a new impact investment fund, focusing on debt and equity investments in North American companies, particularly in sustainability sectors.
  • • Target sectors for the fund include food, water, waste, and clean energy, aligning with growing trends towards sustainable and impact-oriented investing.
  • • Projected ticket sizes for loans will range between $20 million and $75 million, with an anticipated annual return in the mid-teens percentage range.
  • • The fund will cater primarily to mid-sized companies, indicating Avenue Capital’s strategy to support businesses that require substantial financing but may not have ready access to traditional capital markets.
  • • Avenue Capital Group has a robust history, having deployed over $100 billion in various investments across diverse industries and regions, emphasizing their capability in managing substantial investment vehicles.
Summary
Avenue Capital Group is preparing to launch a new investment fund aimed at generating significant social and environmental impact alongside financial returns. This upcoming fund will primarily focus on making debt investments, complemented by some equity positions, in North American companies. The strategic focus on sustainable sectors such as food, water, waste, and clean energy reflects a growing trend within the investment community towards prioritizing impact alongside financial performance.

The fund will target mid-sized companies that are actively engaged in the sustainability sector, offering loans with ticket sizes between $20 million and $75 million. Avenue Capital is projecting an impressive annual return rate in the mid-teens, which is quite attractive for investors looking to balance risk and reward in their portfolios. This approach signifies Avenue's commitment to supporting enterprises that may otherwise struggle to secure necessary financing within traditional funding frameworks.

Avenue Capital Group’s expertise is underscored by its track record of deploying over $100 billion across various market cycles in different industries. This experience positions the firm well to navigate the complexities of impact investing, which requires both a keen understanding of traditional financial metrics and an awareness of the broader societal implications of investment decisions. The launch of this impact fund coincides with increasing investor demand for more responsible and sustainable investment opportunities, indicating Avenue Capital's responsiveness to evolving market dynamics and investor preferences.

By building a portfolio that integrates financial returns with social responsibility, Avenue Capital is likely to attract a diverse range of investors interested in leveraging their capital for both purpose and profit. The forthcoming initiative could serve as a benchmark for other investment firms seeking to enhance their impact investment strategies in the evolving landscape.

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Sources

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AlphaMaven summarised this story from the reporting below. Each link opens the original article.

Reuters Avenue Capital to launch 'impact' investment fund, source says