Reed Smith has re-hired Winston Penhall, the London-based partner who left the firm in 2012 to launch KPMG's funds law practice.

Penhall, who returns to Reed Smith's funds group alongside associate Matt Evans, advises clients on a range of finance matters, including the formation of alternative investment funds and the negotiation of manager and fund service provider agreements.

Speaking to Legal Week, Penhall said that KPMG – which remains a client of the firm – is currently deciding whether to continue its funds law team following his departure.

The moves are a counterpoint to a number of high-profile lawyer hires by the Big Four in recent months.

Last month, Berwin Leighton Painser's former finance head Matthew Kellett confirmed his departure to lead the legal arm of the financial services division at EY, where he will be joined by Addleshaw Goddard corporate head Phillip Goodstone in September.

Last year, KPMG said it would target corporate lawyer hires as part of a push to expand its legal services offering.

Commenting on the new appointments at Reed Smith, Nola Beirne, vice chair of the firm's EME financial institutions group, said: "We've seen a real structural change in the funds market, partly driven by regulatory impacts on bank lending.

"We've found this has put us in a very strong position to advise both investors and fund managers, particularly given the amount of investment coming out of the US into Southern Europe and Germany."

Reed Smith's structured finance practice has grown rapidly since 2012, when the firm hired Berwin Leighton Paisner (BLP) partner Tamara Box, who was recently appointed to the firm's global board.

Other finance partners to have joined the firm in the last two years include Peter Zaman and Claude Brown from Clifford Chance, Brett Hillis and Chris Borg from Dentons, Nick Stainthorpe from Freshfields Bruckhaus Deringer and Helena Nathanson from BLP.

Separately, Legal Week on Tuesday (13 May) revealed Reed Smith global managing partner Alexander "Sandy" Thomas is facing a contested election after just seven months in the role.

John Martini, vice chair of Reed Smith's global business and finance department, has announced his intention to stand against Thomas in elections set for June, the first contested managing partner election at Reed Smith since 2009, when another Philadelphia employment partner – John DiNome – ran against long-time Gregory Jordan.