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Goodbye Morgan Grenfell Private Equity

Investors will tomorrow vote on whether to accept Deutsche Bank’s proposal to fold MGPE into DB Capital.

After months of wrangling it looks like it is now endgame for Morgan Grenfell Private Equity [MGPE]. Reports today confirm that investors in MGPE’s current buyout fund are meeting tomorrow to vote on whether to accept Deutsche Bank’s proposal that the business be folded into its other larger private equity operation, DB Capital.

Although some investors are reported to remain less than happy with the handling of the restructuring process, with Deutsche Bank’s imposition of a 90-day freeze on MGPE investment activity remaining a particular source of concern, it nonetheless looks inevitable that the name of MGPE will disappear inside DB Capital.

As a senior representative in another long-standing UK buyout firm commented: “it will be sad to see the name go – not least because they did some good deals. It was the Formula 1 implosion that caught them out.”

Most market participants felt that the outcome became inevitable after a distinct hardening of resolve from Deutsche Bank that saw it oust MGPE’s CEO Graham Hutton a few months ago and reject a proposed buyout of the business by the remaining management.

Former founder of MGPE and vice-chairman of Deutsche Asset Management, Sir Robert Smith, was tasked with coming up with a solution, despite the range of acceptable options for Deutsche seeming to rapidly reduce to one.

eFinancial News reports that Deutsche itself will have no vote tomorrow [only third party investors do]. Nonetheless the predicted outcome will suit the bank who seems keen to draw a veil over what was once a prize-winning business. Only last year MGPE was awarded the Equity Provider of the Year Award by Acquisitions Monthly magazine.