Avenue Capital Chairman Marc Lasy: Never Bet Against The Fed

CNBC Excerpts: Avenue Capital Chairman and CEO Marc Lasry Speaks with CNBC’s Scott Wapner on CNBC’s “Fast Money Halftime Report” Today

Avenue Capital Chairman and CEO Marc Lasry

Image source: CNBC Video Screenshot

WHEN: Today, Friday, November 15, 2019

WHERE: CNBC’s “Fast Money Halftime Report

The following are excerpts from the unofficial transcript of a CNBC interview with Avenue Capital Chairman and CEO Marc Lasry and CNBC’s Scott Wapner on CNBC’s “Fast Money Halftime Report” (M-F 12PM – 1PM) today, Friday, November 15th. The following are links to video from the interview on CNBC.com:

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q3 2019 hedge fund letters, conferences and more

People have learned to not bet against the Fed: Avenue Capital Chairman and CEO Marc Lasry

If Warren wins the presidency, the market declines 20 to 30 percent: Marc Lasry

All references must be sourced to CNBC.

Marc Lasry on WeWork, Debt:

Yeah we are. Yep. We’re looking at it. We're trying to understand exactly where you are in the capital structure under the new deal. So, that is the half a billion of debt that's outstanding. The problem with it is you can end up having debt come right on top of you. And if that ends up happening, all of a sudden where you were the senior unsecured holder, you'll have a couple billion ahead of you. And therefore, I think that's when you're going to have issues.

Marc Lasry on WeWork, Path to Profitability:

It doesn’t make a difference where you are in the capital structure. If you're losing billions of dollars, that value is going to go away. Right. So for us, what we want to understand is, how are you turning this thing around? And where is it going in? And is there a path to profitability? Because if there isn't, then everything's going to lose their money.

Marc Lasry on Energy Opportunity:

I think there's a huge amount of opportunity. Because you can buy these companies at 2 to 3 times cash flow today.  And the reason you can is because the market is saying I want  nothing to do with energy. I don't care how cheap it is. I think it's just -- it's going to get lower and lower. So, I think the challenge in 2020 is, you're going to have a number of these opportunities--who are going to be the winners?

Marc Lasry on Warrants:

For us on the debt side, you're really buying debt somewhere around 60, 70 cents. In some of these situations, sometimes we're able to get warrants. It's more – it’s happening much more in Europe. It doesn't really happen here in the United States. Here the markets are too liquid. It's hard for us to do something like that. Where we're making quite a bit of money is going to be much more in Europe and much more in Asia.

Marc Lasry on China Lending:

We'll lend people money in China. You know, there's a company that we've ended up investing that's going public, I think next week. They're one of the largest debt collection companies in China. That company itself has seen growth of 100% per year for the last three or four years. So there’s huge – it’s YX. I mean, there's these huge companies that you can do extremely well.

Marc Lasry on Reputation:

I think you absolutely take advantage of that. Because you're going to say, look, we're going to use our reputation to help you. Us putting money here is beneficial. It's like Blackstone doing it. It’s like any of these other firms.

JOSH BROWN: That's why you get the warrants and the upside on the --

MARC LASRY: That's exactly why, yes.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver