Reuters – Avenue Capital Group, a hedge fund specializing in distressed debt, is in advanced talks to sell around 20 percent of itself to the asset-management arm of investment bank Morgan Stanley,the Wall Street Journal reported on Friday.
The deal values Avenue at between $1.5 billion and $2 billion, the Journal said, citing people familiar with the transaction.
If the deal succeeds, Avenue would be the latest hedge fund to sell a piece of itself to an investment bank, in a trend underscoring how these typically small investment firms are becoming institutions with Wall Street backing.
Hedge funds — which can buy and sell a wide range of securities, taking both long and short positions — have grown rapidly in the last few years and have had a huge impact on global markets.
