FLAG Squadron loses two partners

The fund of funds has confirmed that partner David Pierce along with partner Jacob Chiu have resigned from the firm, which was acquired by FLAG Capital last October.

Two fund of funds industry veterans, David Pierce and Jacob Chiu, are leaving Hong Kong-based FLAG Squadron, the firm has confirmed to Private Equity International.

Chiu will be leaving next month and Pierce at an undisclosed time in 2014, according to Wen Tan, managing director at FLAG Squadron. 

Both executives are partners and in addition, Pierce previously was a chair of the FLAG Asia investment committee and Chiu was a member, according to the firm's website. Both have been with the fund of funds for more than a decade, which in Asia puts them in the category of industry veterans.

Pierce also served as chief executive officer of Squadron until the acquisition by FLAG Capital Management was completed in December 2012. 

The integration of Squadron into FLAG Capital resulted in individuals who decided their goals lie elsewhere. Anytime there is M&A, there is a change in circumstances in the firm

Wen Tan, managing director, FLAG Squadron

Pierce’s departure has the potential to trigger a key man clause in an existing fund, but the firm believes the time frame in which he leaves will prevent that from occurring. The firm did not specify which fund. According to the Research & Analytics division of PEI, Squadron has two 2011 vintage funds, Squadron Asia Pacific Fund III, a $400 million vehicle and Keva Squadron Emerging Asia Fund I, which had a final close on $150 million, 

Pierce declined to comment.

“The departures represent a natural transition,” said Tan. “The integration of Squadron into FLAG Capital resulted in individuals who decided their goals lie elsewhere. Anytime there is M&A, there is a change in circumstances in the firm.”

“Squadron is now part of a larger international organisation and is a lot more institutionalised in terms of decision-making processes.”

Neither Pierce nor Chiu have announced post-departure plans, according to the firm.

Pierce did not have specific investment coverage responsibilities, Tan said. His investor relations role will be parceled out across the firm and he will not be replaced. “We're moving away from a CEO model to a more institutional partnership.”

Squadron had two previous departures of senior personnel last year: Boris Bong, managing director, left to join JPMorgan’s private equity team in Hong Kong and Anand Prasanna, investment director, left for Morgan Creek Capital Management in Shanghai, PEI reported earlier.

In October last year, Connecticut-based fund of funds FLAG Capital Management acquired Squadron from owner Search Investment Group for undisclosed terms, PEI reported earlier. The deal marked the first time FLAG had acquired another fund of funds in its 19-year history.