Avenue Capital's Lasry will not be envoy to France: source By Katya Wachtel NEW YORK (Reuters) - Billionaire trader Marc Lasry told investors in his $12 billion Avenue Capital that he will remain at the hedge fund and not become the next U.S. ambassador to France, according to a person familiar with the situation. Lasry, who had been expected to get the nomination, told clients in a note on Tuesday he would remain at the New York-based firm, according to the source, who did not want to be identified. Lasry, who would have been the first hedge fund manager tapped to be a U.S. ambassador, declined to comment. A longtime Democratic donor with close ties to former President Bill Clinton, Lasry was considered the front-runner to be nominated by President Barack Obama as the next ambassador to France. Chelsea Clinton, the former president's daughter, once worked as an analyst for Avenue, which specializes in distressed debt investments. Lasry is one of the few hedge fund managers who was a strong supporter and fundraiser for Obama during his re-election campaign in 2012, hosting a $40,000 per plate fundraiser for him at his townhouse in Manhattan. The source familiar with the hedge fund said Lasry withdrew from consideration when it was determined Avenue would need investor approval to modify some management documents, as Lasry is deemed integral to overseeing several of the firm's funds. But two people close to the hedge fund said there had always been concern about how Lasry would separate himself from the fund without being forced to sell his financial stake. If nominated, Lasry had intended to return to the fund at some point in the future. At an event in March, former President Clinton said Lasry had been notified by the White House he would be nominated for the post. Neither the White House nor Lasry returned requests for comment on the nomination at the time, but a person familiar with the situation confirmed Clinton's remarks. As speculation mounted earlier in the year that Lasry might move to Paris, the firm announced it had appointed a chief investment officer for the first time. Investors said in March that, even if Lasry was to move to France, they would remain with Avenue, which Lasry founded with his sister Sonia Gardner in 1995. Over the years Lasry has increasingly handed over day-to-day management of the firm to Gardner and Lasry's role had become more like a "chairman," they said. Reporting by Katya Wachtel; Edited by Matthew Goldstein, Dan Grebler and Andre Grenon