Reed Smith's London office has completed its first deals for new clients BlueBay Asset Management and Intermediate Capital Group (ICG), following the hire of leveraged finance partner Ben Davis from Travers Smith.

The most recent deal, which closed last week, saw Davis and a team advise Blue Bay, ICG and US Bank to part-fund Five Arrows Principal Investments' acquisition of German healthcare company Prospitalia from Palamon Capital Partners.

Although financial details of the transaction were not disclosed, Legal Week sister publication unquote" reported that Palamon had made a three times  its initial 2006 investment in selling Prospitalia.

Davis and counsel Monica Dupont-Barton, who joined the firm from Freshfields Bruckhaus Deringer last month, have both been tasked with building out Reed Smith's relationships with non-bank lenders in London.

BlueBay and ICG are seen as two of the most active direct lenders in the market, and previously instructed Reed Smith on the financing of the acquisition of Amber Taverns.

Reed Smith estimated the Prospitalia deal was the largest unitranche financing in Germany, and a demonstration that "London-based alternative lenders are beginning to make inroads in the German market", according to Davis.

The London team led the transaction, drafting and negotiating the facilities agreement and associated finance documents and advising on the structuring of the transaction, working with the firm's Munich office, headed by finance partner Rene Lochmann and corporate partner Michael Fisher.

"We both came to Reed Smith to do more with direct lenders," Dupont-Barton told Legal Week. "We can build a real lender business here; it's a very attractive platform for clients to have a bit of a hybrid between proper US capability with knowledge of the precedents there, and know-how in London and Europe, even for deals which are being financed here."

Other firms to act on Prospitalia include Hogan Lovells, with banking partner Stuart Brinkworth acting for Five Arrows on the financing arrangements, while Hengeler Mueller advised the buyer on German corporate matters.

Elsewhere, Willkie Farr & Gallagher advised Palamon, and Milbank Tweed Hadley & McCloy associate Oliver Irwin took a role for BlueBay as the incumbent subordinated lender.

Davis joined Reed Smith in March, tasked with working with the firm's EMEA and US finance practices, as well as the development of the firm's UK and pan-European private equity practice.

He joined Travers Smith in 2005, making partner six years later. During his time at the firm he acted for a number of Travers' major private equity clients including Equistone, Exponent and Bridgepoint Advisers.