It was a big move for funds lawyer Cathy Pitt when she left the “mothership” of Norton Rose Fulbright for CMS Cameron McKenna in January 2014.
Pitt had only ever worked at Norton Rose Fulbright, having joined the firm back in 1996 and been made a partner 10 years later. Despite admitting “it was difficult to leave a place I knew inside out”, she says she was keen to move on and try her hand at something else.
“Around 2009 I started to have children and so was in and out of the office,” she remembers. “After three years I was approached by CMS who wanted to know if I’d join and build up the funds practice. The offer appealed because CMS already had a strong financial services practice but it needed the funds work to give it that full-service capability.”
Brought in as CMS’ head of funds, Pitt has since been responsible for growing the practice and building its profile. Her role sees her regularly speaking at conferences run by Guernsey Finance and the London Stock Exchange, which has been looking at how to attract US issuers. Meanwhile, she continues to act for a range of longstanding clients such as Canaccord Genuity, Invesco and Winterflood.
Added expertise from Scotland
But another way the practice has changed since Pitt’s arrival has been through CMS’ acquisition of Scottish firm Dundas & Wilson in 2014, which brought even more expertise to the group.
“The Dundas & Wilson team have lots of experience in the authorised funds sphere and this gives us an advantage,” she explains. “They’re also based in Scotland, which means we’ve been able to compete on a cost-effective basis, especially as there tends to be pressure on fees in this area.”
While the Dundas & Wilson team concentrate on authorised funds including qualified investor schemes and UCITS (undertakings for collective investment in transferable securities) funds, Pitt specialises in investment trusts and was brought in to expand on this.
“It’s a big part of what I do,” she says, “but we’re also getting more private fund mandates, as well as private equity and venture capital mandates.”
The team recently worked with sponsors Goldman Sachs and JP Morgan Cazenove on the listing of Riverstone Energy in what was the firm’s first instruction from Goldman’s equities and investment bank division in London. Other key mandates include representing the sponsors on HarbourVest’s move from the specialist funds market to the main market, and working on the creation of a fund platform for Ancala Partners.
“We advised Willis Towers Watson on the infrastructure platform Ancala developed alongside it,” Pitt explains. “As infrastructure funds mature, people are putting assets into funds that will realise a return and then moving on. They want anything that will produce a stable yield and infrastructure is an attractive asset class.”
Alongside the growing appeal of infrastructure funds is the emergence of a new type of fund – the European long-term investment fund (ELTIF). Last April the European Council adopted rules to increase the pool of capital available for long-term investment, with ELTIFs created to give investors long-term, stable returns.
“People will be able to put equity investment into infrastructure projects, for example, resulting in a wider investor base,” she says. “There’s a political will for this and for people to put money into infrastructure funds, but it will take a while to take off.”
As new funds come into the picture the ever-changing regulatory landscape remains a big issue for Pitt and her team. She says it is imperative for the team to keep up with the latest rules, with tax on carried interest set to affect the way fund managers receive performance fees. Changes are also expected in listed funds legislation that will require companies to produce a three-page document on risk factors alongside a prospectus.
Amid these regulatory issues and trends Pitt acknowledges that resourcing is something the team will need to build on, with the addition of associates and senior associates as well as a few more partners in the private funds sphere.
“It will be due to success that we’ll need to build the bench out further,” Pitt says. “We’ve been building up the practice against the backdrop of 2009, when the markets were pretty horrific. However, it’s getting better, despite the uncertainty over the EU referendum and the markets having a soft start this year.”
The Lawyer Hot 100 2009
A rising star in the investment funds world, Norton Rose partner Pitt has become a leading light in the firm’s heavyweight investment funds team. After cutting her teeth on Isis Asset Management’s merger with F&C Investments several years ago, she has gone on to advise on a wide range of funds, from Islamic to post-credit crunch structures. A key deal this year was advising F&C Investments on the combination of its property asset management business with the business of Reit Asset Management.