U.S. law firms have dominated global capital markets work in 2016, according to Bloomberg’s preliminary legal adviser report.
American firms lead the pack in 10 of the 12 separate categories for global debt and equity capital markets transactions, with Davis Polk & Wardwell, Latham & Watkins, Simpson Thacher & Bartlett and Sullivan & Cromwell among the standout performers.
Latham & Watkins heads the issuer-side equity capital markets rankings by both aggregate deal value and number of deals, having acted on 64 transactions so far this year, with a total value of $17.5 billion. Latham has also advised the underwriters on 143 equity capital markets deals in 2016—over a third more than the second-placed firm by that measure, Davis Polk, with 105 deals.
Davis Polk and Latham again occupy the top two places when it comes to the total value of underwriter-side equity capital markets work, but this time it is Davis Polk that comes out on top, having acted on transactions that raised over $38 billion—$6 billion more than Latham and enough for a market share of almost 11 percent.
In what is arguably the strongest overall showing of any individual law firm for capital markets work in 2016, Davis Polk also features prominently in the debt charts. The Wall Street firm ranks first by total number of deals and second by aggregate deal value for advice to both issuers and managers on global bonds, acting on a combined 225 deals that raised almost $220 billion.
S&C takes the top spot for issuer-side global bonds work by total value, with its 78 deals raising more than $140 billion—giving it a market share of over 15 percent—while Simpson Thacher ranks first for advice to managers, with an aggregate deal value of $136.6 billion.
Clifford Chance is the only U.K.-based firm to top one of Bloomberg’s global capital markets rankings this year. The magic circle firm has advised the underwriters on IPOs with an aggregate value of $7.91 billion in 2016, beating Latham into second place by just $13 million. Davis Polk heads the issuer-side IPO chart with an aggregate deal value of just $7.4 billion, which highlights the extent to which widespread market uncertainty and geopolitical shocks have impacted on IPO activity.
Bloomberg’s full report will be released in January.
Options Narrow for KWM Europe
King & Wood Mallesons’ beleaguered European arm looks set to be broken up and sold in pieces to other law firms via a pre-pack administration, with Dentons pulling out of discussions to take over the business.
While Dentons is no longer interested, KWM Europe announced on Friday that it had received purchase offers from multiple firms and a KWM source with knowledge of the situation says that the discussions have been “positive.”
DLA Piper, Greenberg Traurig and even KWM’s own Asian arm have been interested in parts of KWM Europe, but former KWM partners have told The American Lawyer’s U.K. sister title Legal Week that Winston & Strawn is the “frontrunner” to take over a large portion of the struggling practice.
A deal is expected to be finalized by the end of this week.
Legal Week also recently revealed that KWM Europe has changed its partnership deed to prepare for a possible collapse.
Partners earlier this month approved an amendment that would ensure any tax losses are split fairly between current and former partners if the firm does go under. The deed did not previously cover what would happen to partners’ tax allocations in the event of the business ceasing to exist.
It follows news that KWM Europe’s key lender, Barclays Bank, has revised its debenture agreement to take extra security over the firm’s assets.
The firm was initially forced to grant the bank a debenture over its assets in July. That debenture covered all of the firm’s securities, goodwill and uncalled share capital, intellectual property and current or future trade debts.
The new agreement is even more restrictive and covers additional parts of KWM’s European business. The range of circumstances under which the deed would become enforceable and Barclays would take control of the business were expanded to include any request by the firm to appoint an administrator.
KWM Europe’s future was cast into doubt by the collapse of its planned $18.4 million recapitalization. Its European partners comprehensively rejected a financial rescue deal from the firm’s Asia arm.
Legal Week’s Rose Walker and I recently took an in-depth look at the causes of KWM Europe’s collapse. You can read that feature here.
Latham Continues London Hiring Spree
Latham & Watkins’ remarkable London hiring spree continues, with Herbert Smith Freehills’ global co-head of energy John Balsdon the latest to join the U.S. firm’s fast-growing U.K. office.
The move will reunite Balsdon with former HSF corporate partner Simon Tysoe, who joined Latham last year and now co-heads the U.S. firm’s energy, oil and gas industry group.
It caps a spectacular year for Latham in London, with Allen & Overy’s former banking head Stephen Kensell the pick of a series of big-name hires the firm has made in 2016.
Balsdon is the 13th partner to join Latham’s London office so far this year—and the 10th to do so from U.K.-based firms.
U.S. firms have been systematically poaching partners from U.K. rivals for years and now dominate the market for high-profile hires in London. American firms’ higher profitability, more flexible compensation systems and greater access to U.S. markets and clients has helped them outmuscle U.K. rivals when it comes to lateral recruits.
Dechert has also boosted its U.K. presence this year with a number of senior hires, while White & Case has been investing heavily in London as part of a strategy to expand its office in the city to more than 500 lawyers by 2020—something no other U.S. law firm has achieved.