US private equity fund Lone Star lays off majority of Asia staff

Photo by Tarik Haiga on Unsplash

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, India, Singapore and Thailand offices on July 8, effective immediately, said two of the people, who declined to be named due to the sensitivity of the issue.

The people accounted for more than 75% of the total workforce in Asia ex-Japan, they said.

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

It comes at a time when private equity dry powder in the region was at a record-high $384.9 billion in June, according to data provider Preqin, with global and local firms raising ever bigger funds, and shows 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, they said.

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

A Lone Star spokesperson referred to the firm’s announcement on July 8 about global business consolidation and reorganisation in Asia. Under the new structure, Donald Quintin and André 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.

The spokesperson declined to comment further.

Lone Star, first established in 1995, set up its Asia offices outside Japan only in recent years with its regional headquarters in Hong Kong, said one of the people. It manages three types of funds – the commercial real estate fund, the opportunity fund and the U.S. residential mortgage fund.

It raised $4.6 billion in the global Lone Star Real Estate Fund VI and $8.1 billion in Lone Star Fund XI in 2019. Most recently it closed a $759 million value-add fund in August 2020, according to the firm’s website.

In an internal email dated July 9, which Reuters viewed, Lone Star‘s 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.

Young did not mention the layoffs or the reason behind the reshuffle in the email.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.