Banking & Finance: Top heavies

The biggest players enjoyed a return to form in the beleaguered banking and finance sphere, with their mid-market rivals looking on enviously. Andrew Pugh provides the lowdown

All finance practices had a difficult 2008-09, when they bore the brunt of restructuring, but 2009-10 saw a distinct pick-up in the finance market.

Although capital markets was volatile, Allen & Overy (A&O) pulled in one of the choisest structured deals of the year with its representation of Lloyds Banking Group on its £2.47bn residential mortgage-backed securitisation (RMBS) issue – the first RMBS issuance since the credit crisis (February 2010). Elsewhere, banking (where, like Clifford Chance, A&O had made deep cuts, particularly on the leveraged finance side) had a stormer. With some £499m in total revenues, A&O was pulling in £2.33m per partner and was involved in a number of major deals for both sponsors and lenders. A ­standout deal saw partner George Link advising the banks on the e1.7bn (£1.4bn) Springer Science & Business Media debt ­refinancing, which led to one of the biggest European buyouts of 2009, with a secondary sale from Candover and Cinven to EQT.

Structurally, the mezzanine market may have frozen over, but high-yield was going great guns despite a hiccup in the latter part of the financial year following the Greek crisis. A&O’s move to recruit high-yield specialist Kevin Muzilla from Milbank saw the firm catching the trend early – and benefiting. One of his first deals in January was to advise Manchester United on its £500m bond issue (Latham acted for the banks). The hire of Muzilla to bolster A&O’s issuer side was echoed by Freshfields Bruckhaus Deringer this July when it hired Gil Strauss from Simpson Thacher & Bartlett straight into the equity. The arrival of high-yield as a dominating force within finance ­underlines the changing transactional landscape for banking lawyers.

In the pink

Linklaters, which had been buoyed in the previous year by the ­mammoth Lehman Brothers administration, polished up its mega restructuring credentials with its roles for RBS and for Lloyds on the Government’s asset protection scheme, but continued to be visible on a series of more conventional market transactions: ­partner Stephen Lucas acted for Commerzbank and RBS on the ­corporate restructuring of Schaeffler Group; partner Gideon Moore acted for the arrangers of the e690m funding of CVC Capital ­Partners’ acquisition of Anheuser-Busch InBev’s Central and ­Eastern European operations (the largest new-money financing of 2009); Moore also advised ING on the debt financing of Apax ­Partners’ £975m acquisition of Marken from Intermediate Capital Group; and partner Nick Syson advised Nomura and Calyon on KKR’s £955m acquisition of Pets at Home from Bridgepoint.

Freshfields had a strong year in both restructurings (Four Seasons, Zim and McCarthy & Stone) and new-money deals. Partners such as Chris Howard and Presley Warner excelled. Freshfields’ lean ­practice accounts for 20 per cent of total firm revenue, but only 17 per cent of total partners.

Clifford Chance put its difficult 2008-09 behind it to post some of its best figures for three years. It grossed a total of £486m, of which £348m was banking and £138m was capital markets. Its biggest acquisition finance deal was advising HSBC (partner Nicola Wherity) on its £1.25bn loan to fund Reckitt Benckiser’s takeover of SSL.

Down a bit

Below the big four revenues at best held steady. Ashurst’s neat ­leveraged finance team remained busy and kicked off its summer in 2009 with a role on the landmark secondary buyout of Wood McKenzie, bought by Charterhouse from Candover for £553m. Mark Vickers advised Lloyds, Bank of Scotland, HSBC and Nomura. It continued to be active in the upper mid-market and saw its turnover inch up from £63.2m to £67.4m.

Lovells, in its last year before merging with Hogan & Hartson, edged up by just £1m to £107m, mainly through restructuring work. Although the complex structured investment vehicle restructurings that occupied Lovells’ practice in 2008-09 tapered off, the firm was involved on the £3.5bn financial restructuring of Pearl Group, advising the senior syndicate banks. Lovells’ acquisition finance ­highlight was on Kraft’s e9.8bn hostile bid for Cadbury, where it had a subsidiary role advising Citibank, Deutsche Bank and HSBC on the English law aspects of the financing.

DLA Piper’s turnover of £81.3m yielded a low average ­revenue per partner of £753,000 – something new banking head Bob Charlton will be looking to improve, although his first ­priority is to cohese the national and Europe, Middle East and Asia practices. The firm’s trade, energy and project finance ­practice held up well, with work such as the Intercity Express fleet ­programme.

Table: TOP 15 FINANCE PERFORMANCES, 2009-2010 (Click image for full version)