The Firms in Pole Position to Benefit From $200B Private Equity Spending Spree
A relatively small number of law firms hold the key European advisory relationships to the buyout clients with the most unspent capital available.
February 18, 2020 at 07:04 AM
3 minute read
Latham & Watkins, Clifford Chance and Freshfields Bruckhaus Deringer are among the firms best positioned to benefit from an expected surge in private equity spending this year, according to research by Law.com International.
The firms hold relationships in Europe with many of the private equity clients that have the most available capital to spend — particularly Carlyle Group, KKR and CVC Capital Partners — based on bespoke figures from data provider Preqin and interviews with a range of top private equity partners.
In total, the top 10 private equity firms are estimated by Preqin to hold $212 billion between them. The top three firms hold around $84 billion. Others on the list include Apollo Global Management, TPG, Warburg Pincus, Advent International, Blackstone Group, Vista Equity Partners and Ardian.
A relatively small number of law firms hold the key advisory relationships to the majority of those financial sponsors in the U.K. and Europe. In addition to Latham, Clifford Chance and Freshfields, rival firms Linklaters and Weil Gotshal & Manges each have key relationships with five out of the 10 on the list.
Kirkland & Ellis holds three key relationships, while Simpson Thacher & Bartlett holds two.
Various private equity partners in the U.K. expect a continuation in the strength of the private equity market in the coming months, with trends such as public-to-private and carve out transactions set to retain their popularity.
"We are feeling optimistic about the year ahead for PE," said David Walker, global vice chair of Latham's corporate department, in an email. "2020 has started well — for example we recently advised EQT and Omers on the Deutsche Glasfaser deal in Germany and The Carlyle Group on Golden Goose in Italy – and these deals follow on from a strong end to 2019.
"We expect that the strength of our practice across Europe and the depth of expertise we have in a number of industries and sectors will continue to pay dividends for us."
Clifford Chance private equity partner Spencer Baylin said: "We're seeing renewed confidence in the market and an uptick in both sell-side and buy-side mandates across the board which reflects our desire to support PE houses across the entire life cycle of their investments."
Linklaters recently took on a high-profile mandate for a subsidiary of Advent on its £4 billion acquisition of U.K. defense and aerospace group Cobham, while Freshfields advised KKR on M&A aspects of its public company takeover of German digital publishing house Axel Springer last year.
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