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.