Investors could close Alchemy as Moulton plans new start-up

Resignation of 'key man' puts future of private-equity house in doubt

Jon Moulton, the legendary buy-out investor who dramatically quit Alchemy last week, is said to be already working on plans to set up a new fund.

Sources close to Mr Moulton said the private equity expert, who became a household name for his high-profile attacks on his own industry, is thinking about starting a small generalist turnaround fund.

One Alchemy investor, said: "This is a huge blow-up, but once the dust is settled Jon is looking at another start-up, concentrating on what he knows best which is distressed situations."

Another source close to Alchemy added that Mr Moulton's resignation is now expected to trigger the "key man" clause and that LPs – investors in the fund – would now call for it to be wound up.

The banker, who is also an Alchemy investor, added: "This row is going to run and run. Everyone in the industry is extremely nervous right now and if you ask any investor in the world – even at the big funds like Blackstone – if they want to take cash, I bet they would all say they want the money. No one wants to make any commitment to any new investments with the markets so uncertain. "

One of the catalysts for Mr Moulton's sudden exit was the decision by Alchemy and its partners to turn the fund into a specialist financial services buy-out house and to appoint Dominic Slade to replace him when he was due to retire in October 2010.

Mr Moulton, in his resignation letter to investors, explained that he believed this strategy was wrong as it wasted a "spectacular opportunity in our area of perceived greatest strength."

The withdrawal of several investors recently meant that Alchemy's investment capacity would fall from £400m a year to about £100m this year, he said in his typically forthright letter to investors. He added this is due to a number of market conditions – low new deal activity, weak investment performance and continuing losses – that had sapped confidence.

A regular media commentator on financial affairs, the 58-year-old also admitted to Alchemy investors that he – and his partners – were to blame for the current situation. "I feel I owe investors an apology for quite a few things," he said. "Together with my partners past and present I made too many investment and people errors."

No one at Alchemy was available to comment but other sources suggested that Mr Moulton had once again gone a step too far in making his resignation letter public and airing the firm's disagreement in such a manner. They also said that, contrary to Mr Moulton's statement, the fund had not yet made a decision to concentrate on financial buyouts.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk