Tuesday 17 November 2009 7:00 pm

Alchemy calls time on new investments

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Alchemy, the private equity firm that ousted its co-founder Jon Moulton two months ago, has closed its doors to new deals and is winding its existing portfolio down.

The firm is understood to have stopped making any new investments – except bolt-ons to companies in its existing portfolio – and is expected to sell off its assets and return cash to investors.

The news comes as other private equity players show increasing optimism and predict a return to large deals in 2010. It had been suggested that Alchemy’s new managing partner Dominic Slade was looking to raise new funds in 2011, but this too is said to be off the cards.

Alchemy had operated an unusual investment model that allowed investors to opt in and out of its rolling fund each year, rather than the traditional model that locks them in for a fixed period.

Moulton, who founded the firm 13 years ago, attacked Slade in his departure letter in September, and warned investors that the fund would be at 25 per cent of its value within a year.

“Dominic was appointed managing partner of private equity some two years ago. He was the best available internal candidate at the time,” he said. “Events and performance mean that I am afraid that I am unable to recommend that Dominic succeed me.”

Three former partners of the fund were invited back last month, while Moulton has launched a new fund, Better Capital.

Moulton – who founded high-profile buyout house Permira – has built up a formidable reputation as a dealmaker through his long history in the industry.