Andersen Legal's member firm Garretts has beaten Freshfields by winning work advising the magic circle firm's long-term client, Scottish Widows.
Garretts has set up and is advising on a £200m property fund. This marks a change for the life assurance mutual as it has used Freshfields for nearly all of its property work in the past.
A source close to Scottish Widows says: “This is specifically in connection with a new fund which has been set up. For that we went out and invited a number of firms, including Freshfields, to put forward proposals.”
The source refuses to comment on why Garretts won the business.
The deal marks the first time that significant work has gone outside Freshfields.
Andersen's Scottish firm Dundas & Wilson has historically been Scottish Widows' preferred law firm north of the border.
Garretts has set up a limited partnership to create the fund and is completing its first major acquisition – a portfolio of 33 properties sub-purchased from Green Properties as part of P&O's recent sale to Green of its £440m estate.
Garretts' head of property Keith Barnett says:”We have set up a new fund so it is a new venture and we were given the opportunity to undertake the property work. We are really pleased to have got into Scottish Widows and to be working with them.”
After Scottish Widows' acquisition by Lloyds TSB last year it is now responsible for the property investments of all the group's funds, which include Abbey Life and Hill Samuel funds on top of Lloyds TSB and Scottish Widows.
Because of this, Scottish Widows' fund manager has much more legal work to farm out, with a fund which has increased in value from just over £1bn to nearer £4bn.
Property partner at Freshfields, Geoffrey Le Pard, admits this is the first time his firm has not been instructed on a group property acquisition. But he says that now Scottish Widows has such a big fund it was inevitable some of the work would go elsewhere.
He says: “They have used other firms from time to time, sometimes on a conflict, sometimes for special skills like housing.
“Scottish Widows had to take a view on the costs of setting up this fund and thought that Garretts would do it cheaper. We still do a significant amount of good work for them,” he says.