Charterhouse Capital Partners is the elder statesman of British private equity, 80 years old and among London’s most prestigious and private firms. Based in a square by the London Stock Exchange and St. Paul’s Cathedral, it has long thrown off profits to a tight circle of principals.

But behind the genteel facade, Charterhouse has been a scene of friction, involving both how its earnings are divided among the staff and how to hand power to a new generation. At a sensitive time-as the firm asks investors for billions for new deals-it is grappling with two soured investments, and details of its internal discord have been laid bare in a lawsuit by a disgruntled former partner.