Morgan Grenfell Asset Management Halts Trading In Some Funds

Published: September 3, 1996
Morgan Grenfell Asset Management, one of Britain's largest fund managers, halted trading in three funds today and suspended a fund manager after it said that it had discovered ''possible irregularities'' in some unquoted securities held by the portfolios.

The funds are the MG European Capital Growth Fund, the MG Europa Fund and the MG European Growth Trust, one of its most popular unit trusts, the British equivalent of mutual funds. Morgan Grenfell, a unit of Deusche Bank, manages nearly $108 billion in its funds.

Fund manager Peter Young, 38, has been suspended while Morgan Grenfell examines the unquoted securities, Paul McNaughton, chief executive of Morgan Grenfell (Ireland) Ltd., said today.

Mr. McNaughton and a spokesman for Morgan Grenfell both declined to comment on what type of securities were being investigated. Unquoted securities could be anything from real estate investments to derivatives to holdings in biotechnology companies that are not yet public.

But Mr. McNaughton said the investigation was centering on the management of MG European Capital Growth Fund.

Mr. Young was responsible for two of the three funds, European Capital and European Growth Trust, which are run by Morgan Grenfell subsidiaries, Morgan Grenfell Unit Trust Managers Ltd. and Morgan Grenfell Asset Management (Ireland) Ltd.

Mr. Young, who has managed the European Growth Trust since 1994, is known for his willingness to invest in risky technology companies. The last three years European Growth Trust rose 165 percent, making it the second-best performing fund out of 1,145 European equity funds tracked by Micropal, a fund researcher. But this year, the fund is down 16 percent through July, placing it 127th among European funds.