Morgan Stanley Investment Management announced that it has formed a strategic alliance with Avenue Capital Group, a New York-based investment manager with approximately US$12 billion in assets under management.

Under the proposed agreement, Morgan Stanley will acquire a minority interest in Avenue, and Avenue
will remain an independent firm led by its current management team. Avenue will invest 100% of the proceeds received from this transaction into funds managed by Avenue.

“This alliance with one of the world’s leading firms in the distressed securities market is another key step in our strategy to build a more robust alternative investments capability,” said Owen Thomas, president and COO of Morgan Stanley

“It is an attractive alliance for both firms,” Thomas added. “Avenue offers specialized expertise in a key alternative investment category, while MSIM provides Avenue with access to an extensive global presence, broad client reach and numerous new investment opportunities. As we continue to execute our strategy for building our asset management franchise, we will be exploring similar alliances that can bring industry leading investment teams and products to our clients.”

Marc Lasry, managing partner and founder of Avenue Capital Group, said, “We are pleased to have the sponsorship of a world-class firm like Morgan Stanley. We see a tremendous number of investment opportunities across all of our strategies and in our key markets. By aligning with Morgan Stanley, we expect to be much better positioned to take advantage of these and other exciting investment opportunities that we see around the globe.”