FLAG Squadron Asia sees exodus of senior professionals - Update

Pierce will transition out of the firm over the course of one year while Chiu is due to leave in about two months. Their imminent departure - coupled with other recent exits from FLAG Squadron - underlines the challenges involved in combining private equity operations.

However, Peter Denious, the partner responsible for international investment strategy at US-based fund-of-funds FLAG, said the changes were the result of open discussion among the senior team. "It was a logical time for these changes to happen," he added. "We feel like we are in a healthy place and that we have great resources to move our joint organization forward."

Pierce declined to comment.

The combined team now numbers 20, including eight investment professionals. There are no immediate plans to make additional hires.

In recent weeks, the two Asia-based FLAG professionals who pre-dated the merger have also departed. Tina Wei and Joseph Tien, a principal and a senior associate, respectively, are understood to have moved on for different reasons. While Wei's future destination is unknown, Tien has joined the Hong Kong office of Pathway Capital Management.

Anand Prasanna, an investment director at Squadron, left last November for a position at Morgan Creek Asset Management. Alice Chow, a managing director prior to the deal with FLAG, has since become a senior advisor and is spending less time at the firm.

Before the merger, in June 2012, Squadron lost Boris Bong, another managing director, to J.P. Morgan Asset Management.

Uniting FLAG and Squadron created an organization with more than $6 billion under management and exposure to North American venture capital, mid-market private equity and real assets, in addition to Asia. The bulk of the Asian exposure came via Squadron.

At the time of the merger, both firms were in the process of raising their third funds but efforts were put on hold once negotiations reached a certain stage. Fundraising for a combined vehicle is expected to start in the near future.

Pierce, who is also non-executive chairman of the Hong Kong Private Equity & Venture Capital Association, led the Squadron team when it was part of Search Investment Group, the family office of Robert W. Miller. The team spun out into a subsidiary in 2006 so it could raise third-party capital. Its second fund closed at $400 million in 2010.

FLAG, which is headquartered in the US, was set up in 1994.

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