Morgan prepares offensive to hold on to clients

Morgan Grenfell Asset Management's top fund managers are set to go into battle this week to prevent their business falling apart after clients' concerns about the stability of the operation were reawakened by the controversial departure of Nicola Horlick.

They will also seek to quash rumours that senior management at the bank's head office in Frankfurt, where the parent company Deutsche Bank is based, are furious about the way the London management of MGAM handled her resignation.

Deutsche Morgan Grenfell, the investment banking arm of Deutsche which runs MGAM, yesterday denied a rift between Frankfurt and London. "There is not one millimetre of difference between Deutsche Bank and MGAM," a spokesman said.

The high-profile departure, which involved a mad-dash trip by Mrs Horlick to Frankfurt on Friday to ask for her pounds 1m-a-year job back accompanied by a press pack, is a setback for the fund management group's attempts to repair the damage caused by the Peter Young scandal in September.

She was one of the key fund managers selected to mend client relationships and rebuild staff morale after MGAM discovered that Mr Young, once a star fund manager, had set up a complex web of Luxembourg holding companies to hide the extent of his investments in unlisted companies.

But her efforts late last year to reassure clients may have gone to waste. Pension fund trustees are by nature cautious and crave stability, so the events of last week will have done little to reinforce confidence in MGAM's management structure.

"This is entirely the opposite of what Morgan Grenfell should have been doing," said one pensions fund adviser. "It can't be anything but upsetting for Morgan Grenfell clients," said another pensions expert.

The Peter Young scandal is at the root of last week's events, because it forced the resignations last year of a number of key MGAM executives, including Keith Percy, chief executive, who hired Mrs Horlick.

A management buyout of the business after the Peter Young scandal is rumoured to have been discussed, although sources believe it would have failed.

Her departure, so close to Mr Percy's, is adding to clients' worries. "There's been a loss of two important people from the organisation who have contributed positive returns," said one top pensions consultant.

John Conroy, head of European asset investments at Towers Perrin, said: "The real problem is that it's going to be perceived as mismanagement by Morgan Grenfell in quite a serious way. We've told clients that it needs very careful consideration and advised our clients that this is quite serious and worthy of investigation."

But because it is costly to change managers, few advisers predict a sudden loss of business. "I don't get any sense of an immediate exodus at all, and we won't get a sense of that until the trustees meet later in the year," said a pensions consultant.

Mr Smith acknowledged over the weekend that the firm may lose some business as a result of the affair but played down its long-term impact.

One client, Alan Bennet, pensions director at Whitbread, said he would wait for further developments before making any decision about pulling a mandate from the firm. "Morgan Grenfell have done a good job for us," he said.

Last week MGAM wrote to its pension fund clients to assure them the remaining fund managers would stay with the firm.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Sport
Wes Brown is sent-off
football
News
i100
Sport
Italy celebrate scoring their second try
six nations
Sport
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
music
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower