NEW YORK, March 15 (Reuters) - It's not every day that a money manager gets tapped as the next ambassador to France, but investors in Marc Lasry's $12 billion hedge fund Avenue Capital could be facing that scenario.
Lasry, a longtime Democratic donor and chief executive officer of the 18-year-old firm, is the frontrunner to be nominated by President Obama as the next ambassador to France, according to several people familiar with the situation.
Speaking at an event in Washington DC on Wednesday, former President Bill Clinton said that Lasry had been notified by the White House that he will be nominated for the post. Clinton's remarks were first reported by Politico.
Neither the White House, nor Lasry returned a request for comment on the nomination. But a person familiar with the situation confirmed Clinton's remarks.
None of the sources were permitted to speak publicly about the nomination process.
If Lasry is nominated and approved by the U.S. Senate, he would become the first hedge fund manager to serve as ambassador, a sign of the growing power of the $2 trillion industry when it comes to political fundraising and political access.
In the event Lasry does decamp from his Park Avenue office to the U.S embassy on Avenue Gabriel in Paris, it appears Avenue Capital investors are unlikely to say bon voyage to the fund.
Officials with two institutional investors in Avenue Capital said that over the years Lasry has increasingly handed over the day-to-day management of the firm to his sister, Sonia Gardner. The brother and sister duo founded the hedge fund that specializes in distressed debt investment in 1995.
A representative for one of the institutional investors referred to Lasry being more like a "chairman" than a hands-on chief executive. The representative for the investor explained the most important thing is that the investing teams managed by 15 senior portfolio managers at Avenue Capital stay together and produce solid returns.
Lasry has told people close to him that he would like to return to the hedge fund after his potential stint as ambassador is over. Lawyers who represent the hedge fund industry said Lasry could accomplish that by putting his hedge fund stake in a so-called blind trust that would be administered by an outside party.
There's another reason investors may not pull money and that's because about 80 percent of Avenue's assets are locked up in private equity-like vehicles with more stringent redemption policies, according to a person familiar with the fund. Just 20 percent of the firm's assets can be withdrawn by investors either quarterly or annually.
Moroccan-born and fluent in French, the 53-year-old Lasry is a longtime Democratic donor, with close ties to the Clinton family. The former president's daughter, Chelsea Clinton, worked for several years at Avenue Capital as an analyst.
Lasry is one of the few hedge fund managers who was a strong supporter and fundraiser for Obama during his re-election campaign last year.
Last June, Lasry hosted a $40,000 per plate fundraiser for Obama at his Upper East Side five-story townhouse in Manhattan.
Married with five children, Lasry, who is an avid collector of old comic books, has an estimated net worth of $1.4 billion according to Forbes. In a November video interview with Reuters, Lasry said collecting comic books is cheaper than collecting rare art - favored by most other hedge fund managers.