By the time siblings Marc Lasry and Sonia Gardner founded New York-based Avenue Capital Group in 1995 with just $5 million, they were already considered pioneers in distressed debt investing. They had spent six years at Amroc Investments, a distressed debt investment partnership that they had founded in 1989 in association with the Robert Bass Group, and initiated an investing style that avoided the use of leverage and stressed liquidity. Avenue blurs the line between hedge funds and private equity...