Derivatives arm on brink as A&O ‘seeks investment’
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Allen & Overy (A&O) is seeking investors for financially troubled derivatives risk analysis business docGenix, which the firm set up following its hire of derivatives star Dan Cunningham.
Dan Cunningham
Derivative Services, which owns 58 per cent of docGenix, was forced to write down a £1.3m investment in docGenix last year, and if further investors are not found it will cease trading.
An A&O spokesperson told The Lawyer: “Most start-ups make a loss. The products we’re providing seem to be something the market needs. We’re looking for further funding, but we’re still behind the business.”
However, one former A&O capital markets partner was doubtful that the work was still there.
“Pricing is a third of that of a year ago,” the source said. “Margins have gone right down. Banks now have software that can do this.”
DocGenix was established in 2008, while Derivative Services launched just a few months after Cunningham - US counsel to the International Swaps and Derivatives Association - joined from Cravath Swaine & Moore on an enhanced package, including a stake in a new derivatives venture. He left A&O in 2009 for Quinn Emanuel Urquhart & Sullivan.
Readers' comments (5)
Anonymous | 6-Dec-2010 3:41 pm
Its common knowldge that A&O only set up that business to finance the ridiculously high package it paid Cuninghem. Now hes left the firm mst be regrettng that decision
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Hamish | 6-Dec-2010 3:48 pm
@Anonymous | 6-Dec-2010 3:41 pm
Cunningham brought in ISDA as a client to A&O I hardly think they're going to be regretting that move.
And learn to use type properly, you're bringing the profession into disrepute.
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Qwerty | 6-Dec-2010 4:08 pm
@Hamish
'And learn to use type properly, you're bringing the profession into disrepute.'
Er...what does 'learn to use type properly' mean exactly?
Pot, kettle, black.....perhaps?
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Anonymous | 6-Dec-2010 5:43 pm
A&O already had virtually all ISDA's non-US work before Cunningham was hired, and for many A&O partners that was already too much. In any case, ISDA now uses other firms more and more, Cunningham or no Cunningham.
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Anonymous | 6-Dec-2010 6:23 pm
Hamish - ISDA were longstanding A&O clients well before Dan Cunningham arrived (don't their London wing share A&O's offices too?). His departure doesn't seem to have had much impact there either!
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