Macfarlanes, Simmons & Simmons and Travers Smith have bagged the mandates on the merger of the private equity arms of investment managers Gartmore and Hermes.
The new entity, to be known as Hermes GPE, has around £4.1bn worth of assets under management.
Macfarlanes acted for longstanding client Hermes, fielding a team led by funds partner Stephen Sims and featuring corporate partner Luke Powell and tax partner Mark Baldwin.
Hermes turned to Simmons funds partner Noel Ainsworth and private equity partner Arthur Stewart. Travers, meanwhile, acted for executive team members of both houses.
A Travers team led by funds partner Ian Shawyer advised Hermes’ fund of funds head Susan Flynn, while funds partner Sam Kay acted for Gartmore’s Peter Gale and his team. Flynn and Gale will become co-chief investment officers for the new business.
Sims said the transaction could be the first of a string of consolidations of existing funds as private equity houses’ ability to finance acquisition deals alone remains in doubt.
“It’s an interesting trend as we always used to see these waves of managers spreading out in the boom years, and this is the opposite,” he said. “The clever ones are now merging and that’s what we’re seeing here.
“We’ve acted for people who are looking to buy out teams but this is the first merger.”
Powell led a Macfarlanes team acting for Hermes last April when the house saw Bridgepoint take over as manager of its direct investment portfolio in a deal worth £550m (The Lawyer, 13 April 2009).
Travers again acted for the Hermes direct investment team, with private equity partner Helen Croke leading. She was also involved on the Hermes side in this more recent deal.
Sims added: “We’ve acted for them [Hermes] on the funds side for a while so it was nice to move into the M&A space.”
Last year, Gartmore launched a £250m IPO, with Freshfields Bruckhaus Deringer landing the advisory mandate (The Lawyer, 30 November 2009).
The newly formed Hermes GPE, to be led by former 3i chief executive Alan Mackay, will manage a portfolio of funds on behalf of more than 20 clients.