Hutton throws in the towel

Morgan Grenfell Private Equity’s chief executive has left the firm over failed plans to sever ties with the firm’s parent Deutsche Bank.

Graham Hutton has quit Morgan Grenfell Private Equity, the Deutsche Bank-owned buyout firm he wanted to turn into an operation owned by management, Financial News reports on its website.

Hutton, who during his tenure at the helm saw the firm’s reputation suffer badly after several key executives left and MGPE’s investment in Formula One company Slec generated a massive paper loss of over £250m, resigned after plans to buy the firm off Deutsche failed.

Sir Robert Smith, deputy chairman of Deutsche Asset Management, is to take over as chief executive.

Whether or not MGPE would be able to pull off a deal with Deutsche has been subject to much debate. As recently as last month rumour had it that an agreement was imminent. Sceptics however always maintained that without Deutsche’s backing, MGPE would find it even harder to recover from its recent difficulties.

Sources familiar with the situation said Deutsche walked away from the buyout because it felt it needed to stay close to the business to support future dealmaking, Financial News said.

The news comes one day after Pierre de Weck, head of private equity at UBS Capital and a director at UBS Warburg, resigned from the bank over a similar failure to secure independence for his buyout operation.