Sharing the American dream


Having arrived in the US with almost nothing, Marc Lasry and Sonia Gardner would go on to build a global distressed debt and special situations investment firm. Today, the siblings are committed to helping others fulfill their potential.

There was never a grand plan for Marc Lasry and his sister Sonia Gardner to become business partners. Fresh out of law school, Sonia had been hoping to become a public prosecutor in New York but narrowly missed out on the opportunity. It just so happened that Marc needed a lawyer he trusted to work with him in the niche department of the investment bank where he created the Bankruptcy and Corporate Reorganization Department. When Sonia agreed to join him, it was only meant to be for three months.

We weren’t supposed to hire relatives at the bank, recalls Marc. But I really wanted to take Sonia on board, so I told the HR department that it would just be some help for me for three months. After that, I promised that she would leave! Her performance was phenomenal, and I realized there was no way we could let her leave. Fortunately, the company seemed to forget the three-month deal, so she stayed and it’s been a great partnership ever since.

What began as a temporary arrangement for the siblings has so far endured for almost three-and-a-half decades. Their partnership has seen them create one of the world’s leading investment firms in its field. Avenue Capital Group – which invests in distressed debt and other special situations – today manages nearly $12 billion of client assets across the US, Europe and Asia.

In the early days of their partnership, Marc and Sonia focused principally on purchases of trade claims. This was a small, misunderstood backwater of the investment industry in the mid-1980s. Even though they faced few rivals, Marc and Sonia worked hard to ensure they were the first to speak to suppliers and trading partners of bankrupt companies to acquire these obligations from them.

Marc’s earliest career experience – first as clerk to a chief bankruptcy judge and then as an attorney in the same field – had given him an intricate understanding of the laws and procedures. He also possessed a singular ability to analyze complex distressed situations.

I’ve always tried to invest in things that other people are nervous about.
I’ve always tried to invest in things that other people are nervous about, says Marc. Often, the perception of risk turns out to be greater than the actual risk. So, my approach is to identify situations where this appears to be the case and seek out the opportunity. Like in a game of chess, I consider what a company is most likely to do and how a particular scenario might unfold. You’ve got to be able to separate the information that is really important from what isn’t.

Pioneering portfolio

Marc and Sonia’s accomplishments did not go unnoticed. A billionaire client of the firm invited the young siblings to come and work within a newly formed investment company.

The two agreed and were given responsibility for managing a portfolio made up of trade claims, distressed senior bank loans and bonds. With assets of more than $100 million, the portfolio was one of the largest of its kind at that time.

The marketplace was very different back then, recalls Sonia. We would call a bank to purchase a piece of debt and there would be virtually no competition. The contracts involved months of negotiations, so being a lawyer was essential. Nowadays, there are standard forms and short periods set for closing transactions. We also used to fly across the country to get documents from the bankruptcy court to gain first mover advantage, but now information is freely available to everyone instantaneously on the internet.

Over two years, Marc and Sonia achieved striking success with the portfolio. It also provided them with invaluable exposure to various other leaders in contemporary portfolio management. The experience gave them the confidence to start a business of their own. The timing was fortuitous. As a US recession struck in 1990, the range of distressed debt opportunities began to multiply. And so Amroc Investments was born.

When we grew Avenue to $1 billion, we were pinching ourselves in disbelief.
Striking out on their own

Amroc Investments was a boutique brokerage firm specializing in distressed bank debt and trade claims, says Marc. Rather than investing our own capital, we were the middlemen, and we developed a lot of trust among clients. Even though we were very small, we were one of the top players since the industry was made up of only three or four firms. At the beginning, it was me, Sonia and a secretary, but we ultimately expanded to more than 50 employees.

For Sonia, building a business was both gratifying and challenging. One day marked in her memory in the early days was going to the office on the weekend and nailing the Amroc sign on the reception wall – a symbol they had grown their company into a real firm.

The growth of Amroc highlighted the distressed debt industry’s potential. Others were starting to pay attention and, by the mid-1990s, some of Wall Street’s largest firms were setting up their own operations. During this period, Marc and Sonia had also been investing in distressed opportunities for themselves, achieving high returns.

It was then that they decided to found Avenue Investments with just $7 million, consisting of capital from themselves, friends and family. When Avenue grew to $500 million, it was Sonia’s idea to focus exclusively on Avenue and close the Amroc business, and clearly we made the right decision, says Marc.

Just over a quarter of a century later, the organization looks rather different. Avenue Capital today operates from 12 offices across the Americas, Asia, Europe and the Middle East. Employing more than 170 people, it manages almost $12 billion of investor assets. We genuinely never envisioned how big the firm might become, recalls Sonia. When we grew Avenue to $1 billion, we were pinching ourselves in disbelief.

Yin and yang

Despite Avenue’s growth, many things have stayed the same, not least of all their extraordinary partnership. I would not be where I am today without Sonia, says Marc. Our partnership is symbiotic, with one plus one equaling three.

We’ve always loved working together, says Sonia. As brother and sister, we have complete trust in each other. While we’re total opposites, we’re complementary, like yin and yang. Marc manages the investment professionals and is the public face of the firm. He is big picture, and I am a details-oriented, type-A personality. I manage the firm’s infrastructure globally and strive to maintain a best-in-class back office. My principal focus is on making sure that the wheels of the bus keep turning every day.

Like siblings the world over, Marc and Sonia have their disagreements. Marc’s view of the world is that everything is possible, says Sonia with a smile. He has a million ideas and never sees any obstacles, whereas I see all the obstacles and make sure we’re fully prepared. We generally agree on what we want to do, so it comes down to the ‘how.’ Sometimes when we have our differences, we resort to the brother-sister way of doing things: we argue behind closed doors, and I usually win the argument.

The privilege of giving back

One subject about which the siblings are always in harmony, however, is the need for doing good. Having lived the American dream – see Marc Lasry and Sonia Gardner: Our lives – they now seek to help others to achieve. We are both big believers in giving back, which we see as our privilege, says Sonia. Our parents instilled us with some really solid values, so I don’t define success as purely financial. Giving back is also key to success.

Advancing gender equality is a particular passion for Sonia. Our mother always inspired me, she says. She always told us that we could achieve anything. She was a very strong woman who held down a full-time job, while also studying for a master’s degree and raising three kids.

Previously, Sonia was Chair of the Global Board of Directors of 100 Women in Finance, and now serves as Chairman Emeritus. In 2020, she was appointed the Goodwill Ambassador for Gender Equality in Access to Finance for the United Nations Capital Development Fund. As Goodwill Ambassador, she advocates for improving women’s access to finance across the 46 least developed countries.

These women need capital to start and grow businesses and provide a path to lift their families out of poverty, Sonia observes. Across both many emerging and developed countries, women are the providers and it’s often very hard for them to get any sort of financing, support or even childcare.

In life, you really do need to try and do the right thing, says Marc. That means not just helping yourself but helping others. Our world is becoming ever more interconnected.

Marc Lasry and Sonia Gardner: Our lives

We were born in Marrakesh, Morocco,” says Marc Lasry. When I was seven and Sonia was four, our family moved first to Paris for six months before coming to Hartford, Connecticut. Our mother insisted on relocating the family to the US. She believed we would have many more opportunities here.

We arrived with almost nothing, recalls Sonia Gardner. We lived in a small two-bedroom apartment right opposite a local bar. Our parents had one of the bedrooms and we three kids shared the other. But while it was cramped, it was a very happy household. Our parents had always told us we were lucky to be in the United States, and we focused on what we had, not on what we didn’t have.

Our parents had always told us we were lucky to be in the United States.
Our mother and father were great believers in the American dream and wanted us to get the best education possible, says Sonia. At first, we attended the local public school, which wasn’t great. But then our mom got a job as a French teacher at a private school so we could get scholarships to attend one of the best private schools in the area.

When it came to college, our mother gave us a choice, says Marc. It was either law school or medical school. Sonia had ambitions of becoming a philosophy professor, but our mother was insistent. In my first year at Clark University, I tried a couple of pre-med classes and realized it wasn’t for me. So, I went on to law school because I thought it would be interesting.

When it came to college, our mother gave us a choice.
I also chose the law over medicine, says Sonia. After graduating, I made it to the final interview at the District Attorney’s office in the Bronx in New York City. At the time, I thought that was my dream job and was devastated when I didn’t get it. In the end, it worked out for the best: the timing was such that I went to join Marc and, once we started working together, I never looked back.

As well as running Avenue, I’m the proud co-owner of the Milwaukee Bucks basketball team,says Marc. It really has been a dream come true; I didn’t know how much I was going to enjoy it until it happened. Very quickly, though, I realized that I am really just a steward of a team that belongs to the city and to the fans.

Like in business, you need to find the best talent to work with. But you can’t just be focused on making money in sports, because the team won’t win that way. I rapidly learned the only way to succeed is by spending money to try and win.

There are a few things I’d tell people who are starting out today, says Marc. First, there are no shortcuts to success, despite what many seem to think. Second, work on your presentational skills: learn how to speak publicly and how to write effectively. I notice these vital communication skills slipping nowadays. Also, try and develop your emotional intelligence. You need to match your IQ with EQ.

If there’s one piece of advice I always give young people, it’s to dream big and have an open mind, Sonia adds. Never give up on your passion. To be successful, you have to love what you do. If your heart isn’t in it and you’re not giving it your all, then you won’t succeed.