Travers shows the value of sticking to your gameplan as private equity leads revival

Anyone who doubts the value of sticking to your gameplan would do well to look at the recent performance of Travers Smith, which as we reported this month has outpaced all comparable City practices in 2009-10 by managing to hike profits per equity partner (PEP) by 53% to £705,000.

In isolation, such a rise in profits can be dismissed in a year in which many firms saw rebounding PEP numbers on the back of tough cost squeezes. However, Travers was one of the few to also manage a rise in revenues – by a healthy 11.6% – so the firm is clearly growing the business.

This performance was, to a considerable extent, thanks to its 20-partner corporate practice, which had been hard hit during the previous two years due to its heavy reliance on the battered private equity sector. Handily, a relative revival in private equity has helped the firm regain its pace. You only have to glance at the recent mandates to see that Travers has secured a very impressive run of work from September through to Easter.

With the firm putting away 10 or so sizeable deals during the financial year, three stand out: acting for Bridgepoint Capital on its £955m sale of Pets at Home to Kohlberg Kravis Roberts; its instruction for Intermediate Capital Group on a large investment in CPA Global; and advising the vendors on the sale of pharma services firm Marken to a company backed by Apax.

Of course, cynics will point out that the firm has benefited from its unusual June year-end and that Travers has traditionally been best represented in private equity on the less profitable management roles. Yet the range of the deals it has handled over the year, combined with the sheer breadth of the upper-mid-market buyout houses that now regularly call on Travers as lead corporate adviser, do not back up that familiar claim. If this is luck, the firm made a fair chunk of it itself. And while it is true that Travers has worked hard to build its links with management teams, with the firm currently having 100 portfolio companies on its books, many of them needing advice, that hardly appears a weakness of its practice .

Added to which, Travers, which has eight partners focused on buyout work, including well-regarded operators like private equity head Phil Sanderson, Paul Dolman, Helen Croke and corporate head Chris Hale, appears to be benefiting from its steadfast commitment to the sector.

"We were able to keep our team together, perhaps more than some rivals, and that was noticed by clients I think," reflects Hale (pictured above).

Certainly the firm's team looks well positioned after two years in which larger private equity rivals like Clifford Chance and Ashurst have been unsettled. In its section of the market, there will also be satisfaction that the profits gap with its old sparring partner Macfarlanes has finally been closed.

Travers has also had a solid run for general corporate work, winning a role on the London Stock Exchange's purchase of much-touted online trading platform Turquoise, advising Channel Four on its Freeview HD launch and handling several large listings on the Alternative Investment Market.

Nevertheless the firm acknowledges that it wants to broaden its corporate practice, which has historically tilted heavily towards private equity houses, brokers and institutions. As Sanderson puts it: "We need to be broader in corporate, full stop. We are known as an M&A shop but there is a space for us to get our brand out there as a broader practice."

That said, narrow has been paying pretty well so far.