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Why well-connected PE partners are worth their weight in gold
When it comes to their legal affairs, private equity (PE) houses are creatures of habit. While corporate law is relationship-driven, PE houses take it to the next level. Individual partners working in that space carry just as much weight – if not more – than firm names.
Hence the almighty kerfuffle that ensues when a PE partner ups sticks and moves to another firm. They’re not just packing up a box of tacky corporate stationery, but potentially a couple of the firm’s most lucrative and reliable clients.
This largely explains the cherry-picking of PE partners seen over the past 12 months. Last April Latham & Watkins embarked on a strategy of boosting its relationship with PE giant Carlyle in Europe. Soon, Clifford Chance’s PE chief, and Carlyle’s lead legal contact in London, David Walker, had jumped on board.
The firm also snared Kem Ihenacho, who is set to join Walker at Latham this year and who previously dealt with Carlyle’s African deals from the magic circle firm.
Shearman & Sterling also boosted its PE client base substantially thanks to the hire of a trio of PE partners from Weil Gotshal & Manges last April. Between PE partner Mark Soundy, corporate tax partner Sarah Priestley and PE associate Simon Burrows, who joined as a partner, the firm has snared a raft of clients including Bridgepoint, Permira and Arle Capital.
No doubt this was White & Case’s gameplan in hiring Linklaters PE stars Ian Bagshaw and Richard Youle last October.
It looks as if the gamble is paying off. Last month the firm won a first-time appointment to HgCapital’s legal panel thanks to Youle’s ties with the business. Now it has emerged that Rhone Capital has also followed Bagshaw to his new firm, winning its first-ever instruction on the group’s €149m (£123m) acquisition of ASK Chemicals.
It’s a formula that works, and the trend shows no sign of slowing. With an incentive that compelling, no wonder firms are so happy to splash the cash when it comes to making top-grade PE hires.