Linklaters targets shadow banking in bid to bolster finance practice

Linklaters has launched a focus group targeting alternative credit providers (ACPs) such as investment managers and corporate lenders in a bid to clinch new sources of fees amid the slowdown in traditional banking work.

Bruce Bell
Bruce Bell

The magic circle firm has created a group headed by City banking partner Bruce Bell to co-ordinate efforts to forge relationships with potential clients, which include asset manager Ares Management, corporate lender Haymarket Financial, Blackstone’s credit arm GSO Capital Partners, BNY Mellon’s asset management unit Alcentra and investment manager Babson Capital.

Bell presented the push to partners at the firm’s annual retreat in Montreux, Switzerland, earlier this year alongside London restructuring partners Yushan Ng and Yen Sum, Frankfurt funds partner Alexander Vogt and London capital markets partner James Harbach.

The group, which targets the so-called ‘shadow banking’ sector not currently under the eye of regulators, is a response to the reluctance of traditional banks to lend, with ACPs taking their place.

Last month a UK Government-backed focus group led by Legal & General CEO Tim Breedon published 11 recommendations for ways of stimulating alternative forms of finance, including calling on an industry-led task force to look into removing barriers on bank lending to support trade finance for small and medium-sized enterprises.

Bell told The Lawyer: “Historically we’ve always done a significant amount of work for alternative credit providers – fund formation, lending, regulatory, restructuring, and so on – but we’ve not been terribly systematic about our approach to them. We decided it was time to more closely co-ordinate our efforts and offering in this direction. So it’s about being more joined up about what and where the opportunities are and what we can offer this type of client.”

The potential clients in the sector tend to operate less formal arrangements for instructing outside lawyers than banks, with many having a small or no in-house legal team, and, in the case of subsidiaries, often have legal teams separate from the larger parent’s team.

GSO, for instance, has its own legal department distinct from Blackstone’s, with the operation headed by general counsel and chief compliance officer Marisa Beeney, a former DLA Piper and Latham & Watkins associate.

Freshfields Bruckhaus Deringer launched a new global financial investors group in January headed by corporate partners Ludwig Leyendecker in Cologne and David Higgins in London with a focus on a number of areas including ACPs.