More Sun Capital Layoffs, More Questions
Two months ago, we reported that Sun Capital Partners had laid off just over 10% of its 200-person staff. My gut take was one of confusion. Shouldn’t a distressed investor like Sun be preparing for its salad days? Doesn’t Sun need an outsized staff, to execute on its strategy of intense, hands-on interaction with portfolio companies (operating execs in-house instead of by the phone, weekly reporting by portfolio cos., etc.)? And shouldn’t Sun have plenty of management fee income rolling through the door, given that it’s investing out of a $6 billion fund that is just 26% called down? All of these questions came flooding back to me over the weekend, when I got word that Sun had laid off another 12 investment professionals. These new cuts follow Sun’s decision last month to close its Tokyo office (one deal in three years), and means that the firm has canned approximately one-third of its investment staff in 2009. Moreover, the firm has no plans to either reduce its fund size or reduce its fund management fees.
