Graham Hutton, ousted former chief executive of Morgan Grenfell Private Equity (MGPE), is set to launch a $500m (€581m) mezzanine fund with Matthew Collins, who quit his role as head of European leveraged finance at Merrill Lynch on January 31.

Hutton left MGPE after the failure of his buy-out bid for the business from Deutsche Bank, following months of internal wrangling over MGPE's investment in Slec, Bernie Ecclestone's company which controls the media rights for Formula One. The sale of Slec led to losses of over £200m (€329m) for MGPE.