Lone Star reportedly lays off majority of staff in Asia

private equity

The private equity firm has retained a small number of people in asset management in its Asia offices who manage the firm’s current portfolio

Texas-based private equity firm Lone Star Funds has laid off most of its investment team in Asia outside Japan in a major retreat from the region, three people familiar with the situation told Reuters.

The firm let go of around 25 investment professionals in its mainland China, Hong Kong and India offices on July 8, effective immediately, said two of the sources, who declined to be named due to the sensitivity of the issue.

The people accounted for nearly 60 per cent of its total workforce in the offices affected, one of the sources said.

The retreat mainly resulted from the firm not finding much investment opportunity in Asia outside Japan, the sources said.

It comes at a time when private equity in the region was at a record high of US$384.9 billion last month (June), according to data provider Preqin, with global and local firms raising ever bigger funds. And it shows that some of them are struggling to put the funds to work due to increasing competition and regulatory uncertainty.

Lone Star, which mainly focuses on distressed opportunities, has retained a small number of people in asset management in its Asia offices who manage the firm’s current portfolio, the sources said.

A full retreat would happen after the firm exits all its investments in the region, they said.

A Lone Star spokesman referred to the firm’s announcement on July 8 about global business consolidation and reorganisation in Asia. Under the new structure, Mr Donald Quintin and Mr Andre Collin, who are in charge of the firm’s opportunities funds and commercial real estate funds in Europe and the Americas, respectively, would assume responsibilities for Asia.

Lone Star said in that announcement it had made other changes to streamline Asia operations and realigned its staffing levels in the region, without mentioning details.

In an internal e-mail dated July 9, which Reuters viewed, Lone Star president and chief legal officer Bill Young also announced the firm’s former Asia president Tony Messina will take a new role as senior managing director, origination, on its commercial real estate platform.

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