Cads pins hopes on restructuring

CADWALADER WICKERSHAM & TAFT

Corporate and finance tie-up in the pipeline

Cadwalader Wickersham & Taft is considering plans to radically restructure two of its core groups, corporate and finance, as the firm continues to battle the effects of the collapse of its structured finance and capital markets practice.

The plans, which have still to be agreed, coincide with an expansion of the firm’s senior leadership and the introduction of a new standalone role of firmwide chairman, as first reported by The Lawyer (27 February).

Cadwalader is examining proposals to merge part or all of its corporate and finance groups, which are currently headed by Louis Bevilacqua and Chris White respectively.

Bevilacqua confirmed that Cadwalader is examining plans to restructure the two groups. “We’re looking at the concept of being better focused on our clients’ needs if we merge the groups to create a unified practice practically and formally,” Bevilacqua says. “But this is a work in progress.”

Cadwalader managing partner Bob Link echoes Bevilacqua, saying: “The merger hasn’t happened yet. If it enhances the platform for our clients, we’ll go through with it.”

Cadwalader believes a merged corporate and finance group could provide a platform for its nascent private equity group, which was launched earlier this month when it hired former Latham & Watkins global private equity co-head Ron Hopkinson (www.thelawyer.com, 7 February).

It is considering whether the new private equity group could act as a natural bridge between M&A, corporate governance and financing.

“This is about synergy for clients,” says executive board member Greg Markel. “As private equity develops the finance component is huge. This move isn’t tied into the downturn in our point of view. It’s not a restructuring but a great opportunity to build in private equity.”

Outside Cadwalader, news of the group overhaul was received differently. One New York recruiter familiar with Cadwalader argues that the move says more about the failure of the firm’s core markets than opportunities on which it is hoping to capitalise.

“Chris White had a $30m-$40m [£15m-£20m] business, but now it’s down significantly,” says the recruiter. “That business has just gone.”

The discussions are taking place against a backdrop of significant change at Cadwalader. Last month the firm was forced to lay off 35 associates from its core real estate-related structured finance and capital markets practice following the downturn in the credit market.

And as reported last week (25 February), Cadwalader has also overhauled its top management, with White appointed as firmwide chairman. The new role, effective from 1 March, will result in an expansion of Cadwalader’s management function, with two positions, chairman and managing partner, replacing the previous sole managing partner role.

Link will continue in his role as managing partner, but will focus primarily on operational matters, while White is expected to focus on strategy.

Link has faced criticism in some quarters as the public face of Cadwalader’s bet on real estate-related structured finance. One former partner, however, argues that it would be unfair to lay the blame for Cadwalader’s current woes directly at the feet of Link.

“I’ve heard that Bob’s under pressure for not having hedged the practice enough, but it’s very easy to blame someone after the event,” says the partner. “No one was complaining when times were good.”

Cadwalader says the new management structure is a reflection of the firm’s efforts to diversify its service offering. Recently Cadwalader has brought in a succession of notable hires aimed at broadening its practice, the latest and arguably highest profile being Hopkinson’s.

Cadwalader is not the only firm in town claiming that the best opportunities often come out of quieter markets. For Cadwalader the current downturn appears to have presented a way for the firm to muscle in on private equity.

“Last year the market was moving too fast, everybody was chasing their tail and focusing on their own practices to be able to look at anything new,” argues Bevilacqua. Not now.

PREVIOUS BLOG POSTS

Demob happy Declan

St Patrick’s Day is still two weeks away, but there was already one happy Irishman in New York last night (Thursday 28 February).

Declan Moylan, the managing partner of Mason Hayes & Curran, is one month away from relinquishing his nine-year hold on the job. At the end of March Moylan becomes the firm’s chairman. And by the sound of things when we met for dinner, he will not miss the job. “I think nine years is enough,” were his words.

But don’t go thinking the Irish market has seen the back of the man. Or indeed the markets in the US, Russia, the Far East…

With Ireland continuing to be a prime source of inward investment, and the US in the sights of Irish real estate developers in return, there’s plenty of work for a firm like Mason Hayes to pick up.

Not that Moylan was all smiles. He admitted to being “despondent” that Hillary Clinton looked to be losing out in the presidential race.

“She opened our office in New York in 2004,” said Moylan. “I thought I was set to have a friend in the White House.”

You might still, Declan, you might still.

Kevin Perry goes large

You can always tell when you’re lunching with a Brit in Manhattan – the restaurant’s empty when you get to dessert.

Long lunches are not the done thing here. There’s money to be made, even in a downturn.

So yes, I admit there was wine. This is not yet a crime in New York. But let me clear one thing up at once. Although comparatively lengthy (ie longer than an hour), and accompanied by a spot of Pinot G, this hardly qualified as a London-style liquid lunch.

The visiting Brit was Kendall Freeman founder and now Edwards Angell Palmer & Dodge partner Kevin Perry. And Perry had a few misconceptions of his own to clear up, saying: “I am not now, nor ever have been, nor ever will be, involved in insurance.”

• Posted: 27 February 2008

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