Avenue Capital

Marc Lasry isn't going to Paris

April 23, 2013: 4:13 PM ET

121206043502-marc-lasry-avenue-capital-gallery-horizontalHedge fund manager Lasry doesn't get ambassadorship.

FORTUNE -- Hedge fund manager Marc Lasry will not be the next U.S. Ambassador to France, following a bizarre process in which the hedge fund manager was told that he was indeed President Obama's pick.

Reuters was first to report the new development, and Fortune has obtained a short letter sent today by Lasry to investors in his firm, Avenue Capital.

From the letter:

"I am writing to provide clarity with respect to the recent speculation in the media regarding the possibility that I might be asked to serve as the next U.S. Ambassador to France.  I am very grateful to have been considered, but I would like to put the speculation to rest and let you know that I will be remaining at Avenue."

Lasry had been a major campaign contributor and fundraiser for President Obama, and was considered a post-election frontrunner for either the UK or France ambassador positions. By late February the rumors were running rampant inside of Avenue, but Lasry himself was mostly in the dark.

"It's considered bad form to ask if you're going to be named ambassador," a source explained at the time.

In mid-March he formally got the news, as disclosed in an offhand comment by former President Clinton. While Lasry waited for President Obama to make it official, Avenue told investors that the firm was promoting one of its own to the new position of chief investment officer.

But Obama never did make it official, and my understanding is that Lasry now has withdrawn his name from consideration. What we don't know if if Lasry withdrew of his own accord, perhaps due either to frustration or difficulties in divesting himself of Avenue (there isn't really a roadmap for active hedge fund managers to become ambassadors). Or because he was listed as a "keyman" on many of Avenue's funds, and investors might refuse to sign a waiver. Perhaps it was Obama who pulled the plug, due to something found during due diligence or a change of heart.

Fortune reached out to Lasry, who declined to comment. Per the letter, he will remain Avenue's chairman and CEO.

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