New York (HedgeCo.net) – Avenue Capital Group is one of the preeminent investment firms in the distressed investing space and in a sad, symbolic gesture, the firm announced that it will be closing its original hedge fund, Avenue Investments. The firm cited negative performance and a shift in focus toward longer-term lockup periods for investors.

With the firm focusing on the distressed investment space, a longer-term lockup is in line with the industry standards. A report from CNBC included a statement from Avenue Capital: “Avenue has determined to wind down its U.S. hedge fund,” said a spokesman for the company in an emailed statement. He noted that the vast majority of Avenue’s capital in the distressed investment space is in long-term investment vehicles with lockup provisions ranging in duration from five to seven years, adding that “the longer-term lockup structure represents the principal direction of the firm.”

The Avenue Investments fund represents less than three percent of the total assets managed by Avenue Capital, so the closing of the fund isn’t a move that will hurt the firm’s numbers, but it is more a sign of the changing environment in the hedge fund world.

Rick Pendergraft
Research Analyst
HedgeCoVest