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Mandel's fast departure underscores the brutal environment that private equity firms are facing in Asia too.

The head of Morgan Stanley's Asia Pacific private equity banking team is leaving the bank, sources told Reuters on Wednesday, less than a year after arriving in Hong Kong to run the division.

Morgan Stanley Managing Director Jonathan Mandel was let go as part of the round of layoffs announced by the bank last month, one source with direct knowledge of the matter said.

Mandel's fast departure from his new post underscores the brutal environment that private equity firms and their bankers face not just in Western countries, but Asia too.

Morgan Stanley declined to comment. Mandel could not be reached.

Mandel was in charge of the team of bankers handling private equity relationships across Asia, excluding Japan. That team is known on Wall Street as the financial sponsors group.

When the credit crunch hit the United States and Europe late last year, Asia was still viewed as a region shielded from the downturn. Private equity firms were expected to continue their buying spree, sending a steady stream of deal and loan underwriting fees to their banking clients.

That expectation has all but evaporated, as Asian markets have tumbled, and lending has stopped at international banks. While private equity firms are able to buy companies for cheaper, most are waiting until the volatility stops, and spending cash rather than borrowing money from banks.

As a result, banks are downsizing the amount of financial sponsor and leveraged finance bankers across the globe.

Morgan Stanley, along with other Western banks in Asia, has eliminated most of its positions on the leverage finance team -- the team that works with financial sponsor bankers to arrange loans for private equity firms.

Earlier this month, Citigroup's head of Asia financial sponsor banking, Christopher Laskowski said he was relocating to Chicago after running the group from Hong Kong for five years.