Few alternative-investment fund managers have had a stronger or more enduring relationship with Bill and Hillary Clinton than Marc Lasry does. It turns out, however, that Lasry, the co-founder of $10.2 billion, New Yorkbased Avenue Capital Group, has some ties to President Donald Trump as well.
Lasry spoke this week at the tenth annual State of the Market Conference in New York, a fundraiser for Youth INC, a charity that funds and supports nonprofits serving low-income and at-risk children in New York City and is popular with the private equity community. Lasrys session was titled President Trumps Impact on the Economy and Markets.
Lasry has a unique perspective on the topic, given that Avenue, which invests in the debt of distressed companies, took Trumps casino business, Trump Entertainment Resorts, into and out of bankruptcy in 2009. At the Youth INC event, Lasry explained the art of that deal, Trump-style.
Hoping for a quick turnaround, Lasry said he went to Trump early on in the bankruptcy proceedings with an offer: Avenue would give Trump 5 percent of the equity of the newly recapitalized company in return for the rights to continue using the Trump name. If not, Avenue, as the new owner, would just work out a new name. Lasry had the upper hand: As the senior secured debt holder, Avenue was much higher up in the capital structure than Trump who, as an equity holder, would not get any part of the new company until the bondholders had been paid back. Nonetheless, Trump tried to strike a deal of his own: He wanted 50 percent of the equity or Lasry couldnt use the name.
Six weeks after that initial meeting, Trump and Lasry went out for lunch, with Lasry still keen to strike a deal. After agreeing that they need to come to terms, Trump said yet again that he wanted half the equity.
Eight months go by, Lasry told attendees, and then he got a call from Trump Tower: Come on over Trump wants to strike a deal. So Lasry headed over to Trumps office building on Fifth Avenue in Manhattan. And Donald says, Listen, I want half the equity, Lasry recalled. The fund manger explained that this is not how it works when you hold the equity in a bankrupt company and youre negotiating with a senior debt holder. Some 18 months later, Trump Entertainment emerged from bankruptcy, still using the Trump name and with Trump owing just a 5 percent equity stake.
Youve got to respect him, said Lasry. He is who he is, and you learn to live with it. When asked by his interviewer what advice he would give President Trump if he had the opportunity, Lasry said, It actually would make no difference what I said.
The fund manager also talked about his experiences with Bill Clinton, calling the former President one of the brightest people I have ever met. Not only was the Moroccan-born Lasry a donor to both Bill and wife Hillarys political campaigns as well as to their charitable Clinton Foundation the Clintons only child, Chelsea, also worked for a time at Avenue.
But at the conference, Lasry told a tale of another side of Bill Clinton. The former president had traveled with Lasry on Lasrys private jet on a trip to the Middle East. One day, they were on the runway in Kuwait, but Lasry had to go back to the terminal for a minute. Returning to the runway, he saw his plane with Clinton and other dignitaries on board taxiing away.
Lasry said he started running after the plane, waving his arms and yelling at it to stop. He then heard people behind him, also yelling. When he turned around, he was face to face with armed members of the Kuwaiti army, telling him he must cease and desist. The plane stopped taxiing, and Clinton appeared. He said, I thought itd be funny to watch you run after your own plane, Lasry recalled, doing an accurate impression of the former presidents Arkansas drawl. You almost got me killed, Lasry told the former President. I know. Im sorry, Clinton replied.
Despite the harrowing experience, Lasry has stayed close enough to the Clintons that, if events had turned out differently, Lasry might be sitting pretty today in a comfortable role in the Presidents administration. Of course, Hillary failed in her bid to become first woman president of the U.S., losing to Trump, and Lasry has continued in his day job, as CEO of Avenue.
Speaking of political ambitions, Lasry was scheduled to be interviewed at the conference with Anthony Scaramucci, the SkyBridge Capital founder who has emerged as a prominent supporter of President Trump. But Scaramucci had to bow out at the last minute having been summoned to a meeting with Trump in Washington at the Oval Office. Scaramucci, having been offered and then not offered a job in the Trump administration back in January, was just appointed the ambassador to the Paris-based Organization for Economic Cooperation and Development, according to a Bloomberg report on Thursday.