Commentary: Linklaters' weirdly credible buy-out relaunch gets better
While the hire of Freshfields Bruckhaus Deringer acquisition finance partner David Ereira raised a few eyebrows, last week's news that Clifford Chance (CC) rising star Ian Bagshaw is to help rebuild Linklaters' buy-out team leaves little doubt that Silk Street is serious about bulking up in private equity.
February 07, 2007 at 11:14 PM
4 minute read
While the hire of Freshfields Bruckhaus Deringer acquisition finance partner David Ereira raised a few eyebrows, last week's news that Clifford Chance (CC) rising star Ian Bagshaw is to help rebuild Linklaters' buy-out team leaves little doubt that Silk Street is serious about bulking up in private equity.
So just how significant is the hire? Well, despite being tipped for great things at CC, no-one would yet bracket Bagshaw alongside heavyweights like Ashurst's Charlie Geffen or fellow CC partner Matthew Layton.
But while big clients of Geffen (Cinven) and Layton (Permira) are far from dormant, they are not quite giving the pair the kind of profile they used to enjoy. Conversely, Bagshaw's key clients – Blackstone and Australian infra house Macquarie – are two of the hottest institutions of the day, both in the UK and abroad. Bagshaw also has a wide and rather enviable set of client relationships, including Candover, CVC and Duke Street.
His pairing with Linklaters' most visible City buy-out partner, Richard Youle, also bodes well. Not only are the two close friends – Bagshaw was an usher at Youle's wedding – but, as relatively new partners, they have their prime ahead of them.
Bagshaw's connections are impressive, but are they enough to prise away any of the big clients from CC's much-vaunted private equity practice? In the case of Blackstone and Macquarie – clients that have been spreading the work pretty widely in recent years – the omens are good. But getting major names away from client favourites like Layton and Adam Signy is another matter entirely.
Candover has been cited as a particularly interesting battleground. Bagshaw, who has been leading many of the client's European deals, will find himself up against his mentor Signy, who has handled the client for 17 years.
Linklaters' other concern could come from the fact there is limited crossover here with Linklaters' buy-out clients, which are mainly focused on mid-market houses such as HgCapital, Montagu, MidOcean and Sun Capital.
The firm plays this down, convincingly arguing that the days of the one-lawyer house are long gone. All it needs is a line in. If the firm can establish itself as a credible buy-out adviser – and it has taken a major step in this direction – it believes it can prosper.
While this is open to debate, there is little doubt that the firm has secured a partner ideally fitted to the pedigree and culture Linklaters needs to move to the next level. Hell, it is even worth the widely over-used tag of coup.
The generation game
Rivals have been quick to link Bagshaw's move with the departure of Frankfurt-based private equity partner Mario Schmidt to Willkie Farr & Gallagher in December. Is this evidence of a talented generation exiting CC's buy-out team?
To be fair, with such a large private equity team, CC was always target number one for firms desperate to break into the sector. And its seven-partner London department is not about to lose its status as the City's top buy-out practice anytime soon.
Yet the departure does raise succession issues. Bagshaw had become one of the firm's most active deal-doers during the last 18 months while CC's biggest private equity names, Matthew Layton, James Baird and Adam Signy, have been working more behind the scenes of late.
With the senior trio all in their fifties, it makes perfect sense for them to hand over client work to the next generation. This will have to be spread among a greater number of partners though. Any attempt to recreate Bagshaw's wide-ranging links could result in CC being raided again in a few years' time.
See Deal Comment at legalweekblogs.com/editorsblog for more deal analysis.
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