Morgan Grenfell Private Equity (MGPE) looks set to be incorporated into Deutsche Bank‘s private equity arm, DB Capital following much speculation over the past year with regards to its future.
MGPE had been fighting to gain its independence, but on July 12 this year, its long-awaited management buyout was blocked. This resulted in the departure of CEO Graham Hutton, and raised investor concerns with regards to the future of remaining executives. Having rejected the possibility of an MBO, Deutsche Bank has been keen to fold MGPE into DB Capital, but this has proved a lengthy process and directors are still awaiting investor approval.
A 90-day consultation period with investors in the fund regarding MGPE’s options was activated in mid-July and Deutsche Bank is in the process of going out with another amended proposal. The reason for the wait is that some third-party investors in the fund still had issues regarding a merger of the two businesses.
Concerns centered around what DB Capital would do to retain existing MGPE personnel, and there are also issues with current portfolio and future investments which need to be clarified. DB Capital and MGPE are keen to incorporate the businesses, and there are indications that the majority of investors are happy to approve this, said a spokesman for the bank.
Surely a decision to combine the businesses will be approved within the next couple of weeks.