Avenue Capital Group, led by billionaire Marc Lasry, is reportedly looking to sell its impact investing business.

This decision comes after the New York State Common Retirement Fund, a major investor in Avenue's first Sustainable Solutions Fund, chose not to participate in a second fund with the same strategy.

The firm, which manages $12.2 billion in assets, is exploring a sale following the pension fund's withdrawal, which has raised concerns about the future of its impact investing initiatives.

Sources familiar with the matter indicate that Avenue Capital is in talks with potential buyers for the portfolio.