Avenue Income Credit Strategies Fund (ACP)
Avenue Income Credit Strategies Fund (NYSE:ACP) is the first closed-end fund (CEF) launched by private distressed debt/equity sponsor Avenue Capital. The advisor to the fund is a well-regarded firm known for both its investing acumen and the founder's personal involvement in politics. In addition, ACP's portfolio manager is an experienced high-yield manager with prior experience at Blackrock and Third Avenue Management.
The fund was launched as a way for investors to access the distressed investing skill of the management company, in a listed, liquid and transparent format. The firm typically caters to large institutional limited partners like Ivy League endowments and public pension plans, so the fund presented an unusual entry point for smaller investors to obtain Avenue's skills.
In particular, the fund offered a way to play the opportunities that might be available in the Europe, as banks shrink their balance sheets. ACP's flexible mandate seemed well positioned for this; the fund has taken advantage of foreign holdings, with 39% in Europe currently. In addition they use some hedging techniques to offset unwanted risks.
