Now is time to buy: hedge fund Avenue Capital

By Michael Flaherty

HONG KONG (Reuters) - Financial assets have become so cheap because of the credit crisis that now is a good time to scoop up bargains, the head of one of the world's biggest hedge funds, Avenue Capital, said on Wednesday.

"Now is a phenomenal time to buy, assuming you think we're not in a depression," Marc Lasry, chairman and CEO of the company, said at the 2008 Clinton Global Initiative meeting in Hong Kong.

"We're looking at valuations we think are extremely low. Unless the unthinkable happens, you'll be fine," he said, referring to the investment environment.

Lasry said the fund is holding around $7 billion in cash. Of that capital, Avenue is investing 10 percent a month, he said.

Six months ago, Avenue, a $20.5 billion hedge fund firm that specializes in credit strategies, posted its largest monthly losses in six years.

Though flows of credit continued to be sluggish and fears of a long and deep U.S. recession have kept stock markets under pressure, Lasry said by the second quarter of 2009 banks will lend again and consumers eventually will spend.

Lasry, a distressed debt specialist, said he sees a 10 percent chance that the current U.S. recession will turn into an outright depression.

Compared to other countries that saw a decade of stagnation, Lasry does not expect a prolonged economic slide in the United States.