Avenue Capital Group is the Fund Manager and has been operating in the Southeast Asian distressed markets since 1999. The Fund is led by its Principals, Marc Lasry, Sonia Gardner, and Malcolm Robinson, who have 45 years of aggregate investment experience in the distressed debt markets in Asia and the U.S. The Principals manage approximately $850 million in Asian distressed debt, through two Asia-focused hedge funds and two closed-end institutional funds (Avenue Asia Capital Partners, L.P. and Avenue Asia Special Situations Fund II, L.P.). In addition to the Asia portfolio, Marc Lasry and Sonia Gardner, together with a separate team of investment professionals based in New York, manage approximately $2.1 billion in U.S. distressed debt. The Avenue Asia team has 17 investment professionals (including 11 based throughout Asia) with approximately 240 years of relevant aggregate investment experience. The Fund has offices and investment professionals in Hong Kong, Thailand and Indonesia, as well as experienced sourcing teams based in Hong Kong, Tokyo and New York. Avenue Asia will draw significant benefit from several key strategic affiliations, including relationships with Amroc (a leading bank loan sourcing firm with operations in Asia and the U.S.) and Texas Pacific Group (a leading global private equity player).

IFC will make an equity investment of up to 10%, not to exceed $40 million, in Avenue Asia Special Situations Fund III, L.P. (the Fund). The target size of the Fund is $500 million.

40.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	40.0

* These investment figures are indicative

The Fund is structured as a closed-end fund, registered in Delaware as a Limited Partnership, with a target size of $500 million. The Fund has offices and investment professionals in Hong Kong, Thailand and Indonesia, as well as experienced sourcing teams based in Hong Kong, Tokyo and New York.

Development Impact: - IFC’s developmental objective in this project is to support a workout alternative for single distressed credits in Asia. IFC will be supporting a Fund Manager with an established track record in single credit workouts, who will employ financial restructuring strategies at the company level. Single credit workouts involve in-depth balance sheet restructuring and differ from the servicing strategy used in NPL pool asset resolutions. - By applying financial restructuring strategies, the Fund Manager will help restore over-leveraged companies in the region to financial health. With extensive experience in Asia and the U.S., the Avenue team is well-positioned to make recommendations to companies and co-creditors on structuring options and valuation during the work-out process. Restructured credits will benefit from better access to international investors, which will enable them to lower their funding costs or extend their debt maturities or both. - Through its workout activities, the Fund Manager will be helping banks to improve their balance sheets. As such, banks and government institutions in the region will gain another avenue to dispose their NPLs, which are a significant and growing burden in a number of Asian markets and use balance sheet resources which otherwise could be productively channeled to credit-worthy clients. - The Fund Manager's investments will lead to stronger relationships with the management teams of the underlying credits, and, with the support of co-creditors, the Fund Manager is expected to push for disclosure, transparency and timeliness of financial information at the company level. IFC’s Role: Over the medium to long term, the sustainability of economic growth across Asia depends to a large extent on addressing structural weaknesses in the financial and corporate sectors. A high level of distressed assets continues to plague financial systems across the region, particularly in China, Thailand and the Philippines. Against this backdrop, a key strategic objective for IFC is to assist with the fortification of the financial sector by strengthening banks’ balance sheets and reducing non-performing assets. In implementing this strategy, IFC supports, to the extent possible, innovative projects, with replicable structures, that are likely to have high demonstration impact. The proposed project is fully consistent with this strategy.

This is a category FI Type 2 project according to IFC’s environmental review procedure. The Fund has committed to establishing an environmental management system that will ensure that investments are consistent with applicable host country environmental laws and regulations as well as applicable World Bank Group environmental, health and safety guidelines and policies; designating appropriate individuals who will have responsibility for the environment and who will attend IFC’s environmental management workshops; submitting to IFC an environmental management plan; obtaining clearance by IFC for any category A or infrastructure investment by the Fund; and submitting to IFC an annual environmental performance report.
Location of environmental documents in locally affected community