Lovells’ international private equity team, which was hit hard by the departures of Oliver Felsenstein and Marco Compagnoni in 2005 and 2006 respectively, suffered a further blow this month when Italian chief Andrea Accornero jumped ship to Simmons & Simmons (www.thelawyer.com, 11 April).
When Felsenstein, who was one of Lovells’ highest-profile corporate partners, gave up his post as German private equity head to join Clifford Chance as part of a five-strong team, it was a major loss for the firm. The fact that international practice head Compagnoni, whose impressive client list included Advent International, the Barclay brothers, Terra Firma, HgCapital and 3i, jumped ship to Weil Gotshal & Manges just six months later only added to that pain – particularly as he took rising star Jonathan Wood with him.
Despite hiring partners Alan Greenough from White & Case and Tom Whelan from DLA Piper in the intervening two years, Lovells has struggled to regain its position in the private equity arena, tending to act for sellers rather than buyout houses on deals.
So does the departure of another private equity head represent a major setback for the practice as a whole?To a degree, yes. Reputationally, any partner loss is damaging, regardless of the fact that people will naturally come to and go from a firm. However, considering that several years ago Lovells had a leading private equity practice, which was regularly the most profitable group across the firm, losses in this area will bite particularly hard.
And all the more so given that Lovells lost clients such as HgCapital to Clifford Chance and Weil after Felsenstein and Compagnoni departed.
John Kitching, who was general counsel at HgCapital at that time, had set up Lovells’ private equity practice along with Leah Dunlop in the 1980s. Last year (10 September 2007) Kitching told The Lawyer: “I was very sad about it, but the fact that so many important people left Lovells gave us no alternative but to have a panel review.”
Aside from the reputational damage, however, Accornero’s departure is unlikely to have a major impact on the firm’s private equity team.
Dunlop, who has headed the firm’s Italian practice since its launch in 2000, is set to take over the private equity beat until a replacement is found. As she has worked closely with Accornero since he joined the firm from Pavia e Ansaldo in 2000, the transition should be relatively straightforward.
“Andrea and I worked together setting up the private equity practice, which is what I’d done in London,” says Dunlop. “In one way or another I’ve been doing private equity work since the 1980s. The practice in Italy is different because the economy’s different – you do see mega-deals, but not as regular features.”
Crucially from the firm’s point of view, Accornero, who was promoted to the partnership in 2003 so he could take over the private equity practice from Dunlop, handled a mixture of private equity and general corporate work.
According to firmwide managing partner David Harris, the firm is positive about the shape of the practice generally. “Our Italian private equity and corporate practice is in very good shape following significant investment over the past year,” he says. “We have a strong team, having recruited corporate partners Paolo Tanoni and Roberto Culicchi and promoted to partnership Gianroberto de Giovanni and Silvio Tersilla. We’re looking to continue that investment over the next financial year.”
Greenough argues that the firm has done well in recent league tables, ranking second behind Linklaters in Mergermarket’s first quarter league table of advisers to European buyouts by value.
In fact, the reason that Accornero’s departure will not come as a major blow to Lovells is largely because the damage had already been done.
Although the firm points out that it works for a number of private equity houses, such as Warburg Pincus, Cinven, Advent International, Carlyle Group and Astorg Partners, the major challenge it now faces is to ensure Lovells’ name appears with the buyer on a greater share of private equity deals – a hard ask given current market conditions.