Ropes & Gray’s hire of Travers Smith private equity star Phil Sanderson is quite a coup for the US firm.
Sanderson has been heading up Travers’ prestigious private equity practice since 2008, when he took over the reins from private equity stalwart Charles Barter who quit to join key client Bridgepoint (1 May 2008).
Sanderson has recently advised clients including Exponent Private Equity, Darwin Private Equity, Silverfleet Capital, 3i and Phoenix Equity Partners – all fairly substantial clients for corporate powerhouse Travers (27 August 2014).
His departure is particularly notable as Travers very rarely witnesses exits from its tight partnership. Within the past six months, the firm has lost two – Sanderson and leveraged finance partner Ben Davis who waved goodbye to join Reed Smith in February (13 February 2014).
But back to Ropes. The firm has been scouting around for a big private equity name to join its ranks for about five years now. It was understood to have courted former Linklaters pair Ian Bagshaw and Richard Youle back in 2010, and has since been loosely associated with a raft of other partner names including Clifford Chance’s current private equity co-head Jonny Myers.
“We have a view that it takes a while to find the right people,” says the firm’s London managing partner Mike Goetz. “It’s been widely publicised that we’ve spoken to others. People know that we’re here and that we have a big private equity practice globally.”
He adds: “It isnt that we’ve not been looking around for the past five years. We’ve been looking all along, and have continued to get some good junior people.”
In many ways, the firm’s dedication to pulling in a big name partner isn’t surprising. After all, when Boston-based Ropes opened in London in 2009 it was on the premise of capitalising on its longstanding relationships with private equity houses and take advantage of Europe’s growing high-yield market (22 October 2009).
Goetz says: “Private equity is a key part of our practice in the US, and was a driver for opening an office in London. We’ve spent a lot of time building up our private equity bench.”
The firm says that it currently houses 20 City-based private equity lawyers in London. And according to its website, Ropes currently has five partners working in the space in the City, including Kiran Sharma and Peter Baldwin who joined the firm in early 2011 from DLA Piper and Jones Day respectively (9 March 2011).
Its clients include private equity giants Bain Capital and TPG, alongside mid-sized outfits like Summit Partners and Vision Capital.
No doubt part of the draw for a private equity partner of Sanderson’s calibre is the debt finance capability sported by a US-based firm like Ropes.
The difficulties faced by UK firms as they try to establish themselves as serious contenders in the global debt financing space have been widely discussed in the market. They include the dominance of US firms in global financing arrangements, the perceived lack of flexibility of some UK firms, and the lure of an increased pay packet from a profitable American outfit.
And for firms like Travers, the problem isn’t necessarily their private equity talent, but their global acquisition finance capability.
As Goetz puts it: “I think the problem is the finance side of things. Many firms have a good UK banking practice, but not high yield. It’s an area in which they’re becoming increasingly vulnerable.”
The willingness of Simpson Thacher to snatch back Gil Strauss, who quit the firm for Freshfields Bruckhaus Deringer four years earlier after failing to make partner is a case in point (21 August 2014). And it looks as if the feverishly competitive climate surrounding the City’s top private equity and financing lawyers is unlikely to slow any time soon.