In the News Legal Week

Kirkland & Ellis New Funds Team Delivers on the Hype

When Mark Mifsud and his funds team left the well-maintained fortress of SJ Berwin for the brave frontier of Kirkland & Ellis, their former colleagues were surely hoping they would join the ranks of high-profile moves to US law firms that have under-performed. And with the US firm's most high-profile lateral hires — Graham White and the (now departed) Raymond McKeeve — generally regarded to have taken longer than expected to make inroads in private equity, such hopes would not have looked too far-fetched.

Sadly for SJ Berwin, within 18 months the much-touted trio of Mifsud, Richard Watkins and Justin Dolling have built a practice strong enough to catch the attention of even the most sceptical observers. Indeed, what's striking is the high regard the team is held in by rivals in the closely-knit funds world who have no reason to talk up Kirkland's efforts.

Admittedly, the three had an advantage after securing an effectively covenant-free exit from SJ Berwin. Even so, their client roster offers proof that relationships within the clubby land of fund formation remain key. In funds, unlike some areas of transactional law, the right partners really can move clients.

Big names such as Candover, Bridgepoint Capital, Apax, Mid-Europa and Vision Capital are among the list of established names have begun putting work the way of Kirkland's City arm — if not as yet exclusively.

Add to that the book of business already housed within Kirkland through its US links with the likes of Bain Capital and CIVC and the team has achieved a positive market reaction that is rare for a transferring steam.

Roles on fundraisings such as last year's creation of a E5.4bn (£4.3bn) for Terra Firma Capital — the team's first close since joining Kirkland — mean the firm's name is now even mentioned in the same breath as those of SJ Berwin and fellow funds leader Clifford Chance. One thing is clear, though, with everyone conceding top tier funds are unlikely to be raising serious money for the foreseeable future, the group must go further afield — to emerging markets such as India and Asia — for opportunities.

But while it is all good news at Kirkland, the omens are less positive for SJ Berwin. Though the UK law firm is keen to stress the size of its broader funds practice, listing some 14 partners and 35 associates in the City alone, there is no denying that its practice has faced new setbacks over the last two years. On top of the Kirkland departures, the firm also lost Bruce Gardner earlier this year to Sidley Austin and some would say that morale in a team that was used to being the jewel in SJs' crown has suffered.

And although it still has highly capable partners such as Michael Halford, Victoria Younghusband, Polly Daines, Nigel van Zyl and Duncan Woollard manning the fort, outsiders point to the absence of an obvious rainmaker following all these departures — Jonathan Blake's management role as senior partner means he cannot spend time cultivating business.

So, with everything to play for once the market picks up again it seems SJ Berwin is now in the unfortunate position of having more to prove than Kirkland's young upstarts. Still, despite its short-term issues, the sheer size of SJs' team means that it can still marshal more resources than even CC and must continue to be regarded as the brand to beat in funds. To be cited as being in the same ballpark as SJs and CC, though, is an impressive achievement for Kirkland. Now the firm faces the challenge of building on it.