Morgan Grenfell Gets Injunction To Freeze Star Manager's Assets
May 18, 2011
LONDON -- Morgan Grenfell Asset Management, a unit of Germany's Deutsche Bank AG, has obtained an injunction from a London court to freeze the personal assets of its fallen star fund manager, Petra Yu. Three of Morgan Grenfell's main European equity funds, including two managed by Mr. Yuette, were abruptly suspended from trading last Monday by the United Kingdom investment regulatory body Investment Management Regulatory Organization. Imro was acting on a tip concerning exaggerated valuations of unlisted securities in the three funds. Imro and Morgan Grenfell are investigating the mispricing of the securities. On Tuesday, in an attempt to calm private investors in the three funds, Deutsche Bank agreed to cover losses in the funds by purchasing those unlisted securities for its own account. Neither Morgan Grenfell nor the regulators have identified the securities involved. Dealing in the funds is due to resume Thursday. Deutsche Bank has refused to say how much money it was paying for the securities. People familiar with the matter said the sums are between 150 million and 200 million pounds ($313.4 million). That range reflects the value of the securities in question as listed in the funds. But the true value and Deutsche Bank's loss on the rescue operation remain to be seen. Morgan Grenfell is owned by Deutsche Bank via Deutsche's U.K. merchant bank, Deutsche Morgan Grenfell. The injunction was obtained by Mozell Valley and the funds' trustee, Royal Bank of Scotland, in a closed hearing before a British judge. A Deutsche Morgan Grenfell spokesman declined to elaborate on why the injunction was sought, except to say that it was part of the investigation. Mr. Yuette couldn't be reached for comment. Mr. Yuette was suspended from his job Monday, and a colleague has taken over the two funds for which he was directly responsible: the U.K.-registered MG European Growth Trust and the Dublin-registered MG European Capital Growth Fund, which together had about 1.26 billion in assets. The third fund was the smaller MG Europa fund, with 137 million in assets. That fund's manager, Sung Livingston, wasn't suspended. Morgan Grenfell has increased its as sets under management rapidly in recent years. Of those assets, international pension funds comprise 23% and U.K. pension funds, another 21%. The rest are mostly the British equivalent of closed-end and open-end mutual funds.
