Freshfields Bruckhaus Deringer

The cream of the world’s M&A instructions do not necessarily flow from having a leading project finance capability, but as Freshfields Bruckhaus ­Deringer found to its cost, it is a ­specialism you ignore at your peril.


Alan Rae Smith
Alan Rae Smith

“If you’re not acting for energy companies on projects you risk losing the relationships, and though the work can be less ­remunerative, it’s a loss-leader,” says one rival partner. ­”Freshfields cut back but now wants to be playing in that space again.”

All magic circle firms have ­reduced the size of their project teams in recent years due to a combination of PFI running out of steam, work becoming more commoditised and rates dropping. The financial crisis did not help either. But the market perception is that, of the four, Freshfields cut too deeply.

The firm clearly had the M&A brand to get it so far in terms of winning deals, while the energy group under Laurie McFadden has undoubted top-tier ­transactional resources at its disposal, but Freshfields needed to go back into the projects ­recruitment market after effectively dumping the practice in recent years.

Cue last year’s arrival of senior Allen & Overy (A&O) oil and gas project finance specialist Alan Rae Smith. Since his ­arrival, the banking partner has been pulling together ­Freshfields’ project finance ­capabilities around the globe.

That team includes finance partners Kent Rowey and Melissa Raciti-Knapp covering North and South America from New York. The Middle East ­remit is covered by Joe Huse, while Asia is down to Don Stokes and Robert Lonergan.

Other key lawyers include Tony Foster in Vietnam, Harnek Shoker in Bahrain and former private equity house Abraaj Capital executive ­director Pervez Akhtar, who the firm hired last year from magic circle rival A&O to be Middle East corporate head, with Rae Smith helping to bind it all ­together.

“The rationale is ­pretty ­simple,” says Rae Smith. ­”Energy-based clients like Freshfields’ ­offering in areas like M&A, DR and antitrust but felt it was not as developed as it should be on the energy project ­finance side. Now it’s in the process of being built out.”

Why is that important? ­Because via project finance a firm’s wider practice gets the nuts and bolts of understanding a client’s business. And with the expected vast spend of the world’s leading energy ­companies in the coming years, it will pay to be close.

Freshfields has some way to go before its project finance ­capabilities match those of ­Linklaters, A&O or Clifford Chance, but its sector-focused approach is attractive to an ­increasing number of clients.

Since Rae Smith’s arrival Freshfields has displaced ­Linklaters on BG Group’s panel – appointed by his former A&O partner and current BG general counsel Graham Vinter – and, critically, picked up a place on BP’s panel this year.

Freshfields’ relationship with BP stretches back more than a decade but until recently this was more on the dispute ­resolution side. The firm ­handles large amounts of ­international arbitration for ­energy companies, which is not seen as a conflict as it tends to be opposite ­governments.

Around five years ago ­Freshfields started getting more corporate work from BP. The combination of new general counsel Rupert Bondy and a major incident equalled a panel place for Freshfields.

Freshfields is also making a big push into the African ­market. In collaboration with The Economist Intelligence Unit the firm produced a report to raise awareness of the ­potential risks as well as ­highlight the opportunities that Africa presents to the ­extractives industry.

New work includes advising Tullow Oil on its proposed ­acquisition of EO’s offshore Ghana ­interests; Eni on its ­proposed purchase of Heritage’s Ugandan interests; Petrofac on its ­purchase of a 15 per cent stake in Nigerian Seven Energy; and Amni on its portfolio of ­operations.

Freshfields also sells itself on its dispute-handling skills, launching a global ­investigations practice in 2010.

Star partners

Alan Rae Smith, Laurie McFadden, Kent Rowey, Joe Huse, Sebastian Lawson

 

Top three sectors

Oil and gas

Electricity/power

Mining and minerals

Top three geographical regions

Europe

Russia (and former Soviet republics)

Middle East and North Africa

Top deals/projects

Rosneft’s $16bn strategic alliance with BP

Client: Rosneft

Lead partner:Sebastian Lawson

BP’s strategic response to the Gulf of Mexico oil spill

Client: BP

Lead partner: Mark Rawlinson

E.on’s 2.7 per cent sale of its stake in Gazprom to VEB

Client: E.on

Lead partner:Kirsten Floss