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Now Morgan Grenfell suspends pensions chief

Banking group's 'superwoman' fund manager may have tried to recruit 20 colleagues to join her in a move to another firm
Deutsche Morgan Grenfell was thrown into renewed turmoil yesterday when it suspended Nicola Horlick, the top fund manager who has been nicknamed superwoman by the City.

Mrs Horlick, who heads pension fund management of pounds 18bn for the banking group, is believed to have tried to recruit up to 20 colleagues to join her in a move to another investment management group.

But the plan appears to have misfired and she is understood to have been confronted last Sunday by Robert Smith, chief executive of Morgan Grenfell Asset Management, who subsequently made the decision to suspend her.

Mrs Horlick's nickname, a title once used by the writer Shirley Conran for a book about how to run your life, refers to her ability to juggle life at the top with looking after five children.

It came from Mrs Horlick's combination of a large family, a demanding job and marriage to another top City investment banker, Tim Horlick, chief operating officer for European investment banking at Salomon Brothers.

The suspension of the best-known fund manager at DMG is a severe blow to the company, which had been rebuilding morale and attempting to persuade senior fund managers to stay for the long term after the shock of the Peter Young scandal.

DMG denied any link with the scandal that broke last year when Mr Young, a senior fund manager, was sacked for gross misconduct after the suspension of trading in three Morgan Grenfell funds.

Mrs Horlick, 35, was on maternity leave after giving birth to her fifth child when the Peter Young scandal broke.

She is known to have been in negotiations recently with ABN Amro, the Dutch bank, but it is understood that this is not her current destination.

An investment banking source said she had gone as far as telling her clients and staff that she was joining ABN Amro, which suggests that the plan may have later fallen apart.

Another source close to the affair said that ABN Amro might have found it difficult to continue negotiations with Mrs Horlick, because of the internal row that has erupted over her planned departure at DMG. ABN Amro refused to comment.

A DMG spokesman said: "We have suspended her today pending the outcome of an internal investigation which will look at a potential breach of her contract. It has nothing to do with the Peter Young affair nor any suggestion of financial impropriety."

DMG would complete its investigation into the potential breach of contract by Mrs Horlick "as quickly as possible" but said her suspension was purely internal and had no regulatory dimension or link to last year's events.

Neil Dunford, chairman of Morgan Grenfell Investment Managers, the pensions arm, will take over day-to-day running of the operation while Mrs Horlick is suspended.

Imro, the fund management regulator that is expected to levy a stiff fine soon for the Peter Young affair, does not appear to have been informed ahead of the announcement to the press.

Somebody who has known her since university said: "She is so dynamic she is frightening."

A persistent rumour in the fund management industry was that she might be going to ING Barings, which would bring full circle the row last summer when ING sued DMG for $10m (pounds 6m) for poaching a team of 50 of its Latin American specialists in New York. The case was settled out of court in the autumn.

JP Morgan was another rumoured employer for Mrs Horlick. There was also a suggestion in the market that she was to replace Tony Dye, the fund manager heading PDFM, who has gone out on a limb in predicting a stock market crash.

A spokesman for PDFM said: "It's categorically not true." However, shares rose on the back of the story, on the theory that PDFM would turn into a buyer of equities.

Another source said that Mrs Horlick had been unhappy with proposals by Mr Smith, her immediate boss, to switch her to management of the unit trust business until a permanent recruit could be found to fill a vacancy there.

The source said: "She is such a high flyer you'd have to ask why she'd want to go and work on that side."

Keith Percy, the chief executive, and three other directors of the fund management group left after an internal investigation into the Peter Young affair revealed "management failings".

Mr Percy and Mrs Horlick, who was recruited five years ago from Mercury Asset Management, were regarded in the City as the two driving forces behind the success of Morgan Grenfell's fund management business.

"Nicola's departure is going to be very disturbing. You've got to think of trustees, who will be asking who is managing our money. The fact that Nicola has gone won't stop it if those other 20 are going too," said one source familiar with the pensions management business.

The source added: "When Keith Percy had his problems, somebody had to hold it together. She was the one and she was seen as very able."

Another pension funds expert said: "She can't go without having a knock- on effect."

Initially there were suggestions that all bonuses would be cut at DMG after the Peter Young affair because of losses which could total pounds 400m, including money injected into the funds by Deutsche Bank, the parent group.

But the reality of a competitive market for personnel left DMG promising to continue to pay bonuses to key staff and it offered lucrative contracts to tie people in.

Mr Young was sacked after irregularities were discovered in valuations of his funds. He is being investigated by the Serious Fraud Office and he denies any criminal activity. The affair has already led to casualties at Morgan Grenfell Asset Management, with a purge in October of senior management.

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