Avenue CEO Marc Lasry Out as Candidate for Ambassador Post

Marc Lasry
Jonathan Alcorn | Bloomberg | Getty Images
Marc Lasry

Marc Lasry is staying at Avenue Capital and is no longer in the running to be the U.S. ambassador to France.

In a letter to investors Tuesday, Lasry said he was "grateful to be considered" but would instead remain at the firm, which manages $11.5 billion, as its chairman and chief executive, according to sources familiar with the matter.

The vetting process had become cumbersome and was holding up projects that Avenue planned to pursue, according to a source. One point of contention: the $3.7 billion in funds Avenue had earmarked for European investment.

Avenue's Marc Lasry Out
Avenue's Lasry Out of Running for Ambassador Gig   

Sources said that preliminary discussions focused on placing the European assets, as well as Lasry's majority stake, in a blind trust to avoid a conflict of interest.

The CEO's remaining in the job obviates such engineering. A spokesman for Avenue declined to comment.

A longtime bundler for the Democratic Party, Lasry was heavily involved in fundraising for President Barack Obama, hosting a $40,000-per-plate dinner at NoMad restaurant in Manhattan.

Previous press reports had suggested that Anna Wintour, editor-in-chief of Vogue, could also be a candidate for the ambassadorship.

—Written by CNBC's Kayla Tausche