Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. The US firm is understood to have attracted private equity house Bridgepoint as a new client, an outfit that had traditionally taken advice Clifford Chance, Linklaters and Travers Smith.
While the European mid-market private equity house has instructed a broad network of firms over the years, it has traditionally kept three outfits particularly close at hand – Clifford Chance, Linklaters and Travers Smith.
In fact, its general counsel Charlie Barter told The Lawyer recently, “when I counted how many firms we’ve used in the last year I counted 80. We’ve used those including Latham & Watkins, Garrigues, Zhong Lun, NCTM in Italy, Kirkland & Ellis, Mannheimer Swartling. We don’t go to any old firm, but we do have our favoured ones and historically it’s been those three in London.”
However, for the private equity house’s next fund, Bridgepoint Europe V, which is reportedly in the planning stages at the moment, Barter is understood to have taken a fresh look at its roster of UK advisers – loosening ties with the two magic circle firms, and forging a new relationship with Shearman & Sterling.
Unsurprisingly, Travers Smith has retained its post as one of Bridgepoint’s go-to advisers on UK matters. Barter is a member of the firm’s alumni, having co-founded its private equity group back in 1996. The private equity house has turned to the firm on multiple UK deals, including its acquisitions of First Credit in 2004, Tunstall in 2005 and Cambridge Education Group in 2013.
At Clifford Chance, Jonny Myers is Bridgepoint’s first point of contact. However, the group also had strong links with private equity partner Kem Ihenacho who recently exited the firm for Latham & Watkins (18 February 2014). Both Myers and Ihenacho have previously led transactions for Bridgepoint individually, as well as working together to lead its acquisition of cycling and sports goods retailer Wiggle in 2011.
The firm’s other go-to magic circle firm, Linklaters, fielded a number of partners on Bridgepoint transactions including Charlie Jacobs, on its 2007 acquisition of Gambro Healthcare. However, it’s thought that former partner Ian Bagshaw, now at White & Case, struck a particularly close relationship with the private equity house in recent years, taking a lead for its portfolio company Quilter in its bolt-on of Cheviot Asset Management in 2012.
Between them, the three firms have swept up the majority of Bridgepoint’s UK work, with DLA Piper, Freshfields Bruckhaus Deringer, Dentons, Allen & Overy, Ashurst and Latham & Watkins among the firms earning Bridgepoint’s instructions with a more Continental bent.
So, what’s changed?
Numerous sources suggest that Barter, inspired by the departures of Ihenacho from Clifford Chance and Bagshaw from Linklaters, instigated a prowl for a new collection of advisers, kicking off a competitive tender process to narrow its key counsel down to just two.
Travers Smith, it seems, was a shoo-in for one of the spots given its longstanding relationship with Barter. And while firms including Linklaters and White & Case are all thought likely to have pitched, Shearman & Sterling won out, securing its position as Bridgepoint’s second key adviser for UK or global work.
The win is a first for Shearman, which has never been instructed by Bridgepoint in the past. However, the firm’s relatively new private equity partner, Mark Soundy, who joined the firm from Weil Gotshal & Manges in May 2013 walked through the door with ready-made ties to the client. In recent years, the partner advised on its $950 sale of Environmental Resources Management (1 August 2011) and its £320m disposal of All3Media among others. All3Media turned to Soundy again this week for its sale to Discovery Communications and Liberty Global (14 May 2014).
While Clifford Chance and Linklaters are still likely to pick up bits and bobs of work from the client, Shearman will no doubt bite into a sizeable chunk of the Bridgepoint pie.
The move is the latest in a string of bad fortune for the magic circle firms’ private equity teams, given the exit of a number of their key partners over the past 12 months. Ihenacho’s departure from Clifford Chance, along with David Walker and Tom Evans, is thought to have potentially scuppered the firm’s strong relationship with private equity giant Carlyle.
Meanwhile, Bagshaw’s departure from Linklaters for White & Case alongside fellow partner Richard Youle has also caused ripples, with the partners gifting the US firm new mandates from loyal private equity clients HgCapital (18 March 2014) and Rhone Capital (24 April 2014).
Bridgepoint declined to comment.