Asset finance - increasingly not for every banking team
Recent weeks have seen no less than five asset finance partner moves announced, with Berwin Leighton Paisner, Ince & Co, Mayer Brown, and, most notably, Hogan Lovells all moving to strengthen their City practices. While the timing of the appointments is more down to coincidence than any single driver in the market, the moves illustrate the differing approaches to asset finance across large law firms.
April 14, 2011 at 01:44 AM
4 minute read
Recent weeks have seen no less than five asset finance partner moves announced, with Berwin Leighton Paisner, Ince & Co, Mayer Brown, and, most notably, Hogan Lovells all moving to strengthen their City practices. While the timing of the appointments is more down to coincidence than any single driver in the market, the moves illustrate the differing approaches to asset finance across large law firms.
For Hogan Lovells, the hire of high-profile Linklaters partner duo Robert Fugard and Simon Gwynne is a sign of the firm's desire to strengthen its practice outside the aviation market and build upon its international practice. Similarly, Mayer Brown's hire of former Orrick Herrington & Sutcliffe European head Stuart McAlpine hands the firm its only London partner focusing purely on asset finance, with the appointment coming as part of a bid to leverage the firm's asset finance strength in Hong Kong, the US and France.
The contrast with the impact on Linklaters, then, is stark, as the departures effectively mark the firm's withdrawal from mainstream asset finance work in London. They leave the firm with no dedicated asset finance partners in the City, although banking partner Olga Petrovic will take responsibility for the practice. Petrovic says that it is not just the profitability of asset finance work that prompted Linklaters' decision to step back from the product line – although the sector is notoriously cyclical and less profitable than many areas of banking.
Rather, the decision reflects Linklaters' continued efforts to refocus its client base around both its core clients and, within that group, the core activities of those institutions, with key clients like Citigroup and Royal Bank of Scotland not putting much focus on the market. Petrovic comments: "It isn't just a question of profitability but more about the focus on clients that are important to the firm as a whole. This is consistent with the way in which a number of banks have sought to reposition their practices in recent years."
It's a position that is refuted by those with larger London asset finance teams such as Clifford Chance (CC) and Norton Rose, with the latter firm having more than 10 City partners focused on the sector. They suggest that not only are banks still lending but that there is still much value to viewing such relationships in a broader context, meaning that having a strong asset finance practice can help consolidate relationships with key banking clients and help secure mandates in other related areas.
CC, for example, has run some its Terra Firma deals with Dublin-based aircraft lessor AWAS through its asset finance team rather than corporate, while Norton Rose counts transport as a key sector, with the firm's complementary focus on banking and finance meaning asset finance sits neatly within its business. Norton Rose is also one of five firms (alongside Allen & Overy, Reed Smith, Simmons & Simmons and White & Case) to have been appointed to the 2008 legal panel of the European Export Credit Agencies (ECA) to advise in relation to new Airbus aircraft transactions involving ECA financing – appointments which will guarantee greater work levels for successful firms.
While examples of recent significant mandates seem to be few and far between, partners suggest there are enough portfolio restructurings and other mandates around to keep practices busy, even though few predict further significant moves. CC asset finance partner William Glaister comments: "We're above profitability within the firm – you just need to have the right balance and sector focus. So, for example, we do the clients' whole work – not just asset finance. Magic circle firms can do this, and do it profitably."
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