Jon Moulton, the high-profile private equity boss best known for his tilt at Rover, quit his own firm Alchemy Partners on Thursday – and he did so in style. The always-outspoken Moulton sent a letter to investors explaining that he’d had a major spat with three of the partners over strategy, accused them of various levels of incompetence, and said he feared for the future of the firm he founded back in 1997. Since he still has a substantial chunk of his own money in the fund, it does look a bit like he’s cutting off his nose to spite his face...
Moulton signed off from Alchemy with a withering attack on Dominic Slade, who was promoted to run the firm’s buyout unit last year and will apparently succeed him as managing partner. In his letter to investors, Moulton said he didn’t agree with Slade’s plan to make the firm a financial services specialist, as opposed to a turnaround operator more generally; this would be ‘contrary to the positioning we have created’ and ‘wastes a spectacular opportunity in our area of perceived greatest strength’, he said.
But it’s not just about strategy. It’s also personal: Moulton said there had been ‘continuing concerns’ about Slade’s performance. (He also slammed the three directors backing Slade’s plan, claiming that two have never led a deal for Alchemy and the other has never made the firm any money). As such, said Moulton, he couldn’t recommend that Slade replace him – although apparently the partners have already voted unanimously to that effect.
It’s been a tough couple of years for Alchemy, which hasn’t done a stand-alone deal for some time and has seen its biggest investor reduce its commitment amid weak returns. Moulton, who’s always been pretty bearish about the economy (though admittedly he's been calling the downturn for at least eight years), has continued to sound off in the press, often about the iniquities of private equity itself. This hasn’t always gone down well within the industry (on the ‘biting hand that feeds’ principle) – and since he’s clearly lost support in his own boardroom, maybe it hasn’t gone down well closer to home either. ‘Alchemy is not what it was,’ his letter began gloomily – in fact, he even suggests investors might be better off if the fund was wound down.
The odd bit is that Moulton apparently still has £10m+ of his own money in there – and it seems unlikely that slagging off the firm so publicly is going to do this investment any good (Alchemy itself seems to realise that public rows and private equity don’t mix: Slade released a remarkably generous tribute to his ex-boss, presumably in an effort to smooth things over). Then again, Moulton was due to retire in a year anyway; with his vineyard in Kent and estimated fortune of £100m, perhaps he’s not too bothered about the odd million here or there.
In today's bulletin:
G20 talks stimuli - as car sales rise again
Google's Chinese takeaway for UK businesses
Moulton quits as Alchemy boss after boardroom bust-up
Editor's blog: You get what you pay for
Bat off tricky questions, with YouTube