‘I know you’re not supposed to say this, but it’s a once-in-a-lifetime opportunity. You’re not going to see this again: Where you’ve actually got an economy that’s fine, and you’ve got a Fed pumping trillions of dollars in.’
His $14 billion Avenue Capital firm has capitalized on such struggling brands as Hertz HTZ, 4.05%, Macy’s M, -2.19% and J.C. Penney JCP, -3.83%.
“You’ve got a lot of companies that are in trouble,” Lasry explained, comparing what we’re seeing in the market now to what happened back during the Great Recession. “It’s a once-in-a-lifetime, but it happened 10 years ago, also,” he added with a chuckle. Bankruptcies represent good opportunities to buy from noneconomic sellers or people who need to sell, Lasry told Barron’s in an interview last month. That’s where Avenue Capital comes in.
“If things turn out, I will do exceptionally well. If a company has to liquidate that’s OK, because I’ll make money on the liquidation,” he said at the time.
Lasry also suggested the economy is better positioned to weather the storm brought on by the coronavirus than it was in the face of the collapse in 2008.
“Today we all know something,” he said. “We will be fine in two years. People will be back out, there will be a vaccine. The question is: How long will it take to get back to normal?”
"You've got a lot of companies that are in trouble," Larry said. "It's a once-in-a-lifetime, but it happened 10 years ago, also."
But Lasry believes the economy is better prepared to survive the ongoing COVID-19 crisis than the economy could have, had this happened in 2008.
He said: "Today we all know something. We will be fine in two years. People will be back out, there will be a vaccine. The question is: How long will it take to get back to normal?"
He also said that making loans to other companies that subsequently collapse is what helps debt investors like himself do "extremely well."
Avenue Capital, which says it manages about $10 billion in total assets, has invested in struggling brands like Macy’s (M) and J.C. Penney, Lasry said. The firm can issue senior debt that takes priority when a company begins to pay off its loans or cede ownership, Lasry added in the newly released interview, taped on June 29.