Kirkland's New Group Combines Real Estate and Energy Teams Into Integrated Practice
John Pitts discussed with The American Lawyer the formation of Kirkland’s integrated Real Assets Practice Group, combining the Firm’s market-leading Real Estate, Infrastructure, Energy and Minerals & Mining practices.
With demand in real estate and digital infrastructure surging, Kirkland & Ellis said on Friday that it was combining its real estate practice with its energy and infrastructure and mining groups. The firm said the combined practice, called the real assets practice, offers an integrated approach to deals that often involve buildings and land, as well as power, data and connectivity, noting that those teams of lawyers already work across offices.
While firms often announce new or multi-disciplinary practices with a marketing motivation in mind, Kirkland's approach may also help several other goals, including staffing the best client teams, pitching clients, practice strategy, and talent recruitment. Other firms have brought similar offerings to the market. Cooley, for example, launched an energy, infrastructure and real estate group with a former Baker Botts energy leader.
In a statement, Kirkland said it wanted to align with clients and “formalize” its approach, saying the combined real assets group would have more than 600 lawyers across its footprint.
“We’ve been seeing clients integrate real estate, infrastructure, energy and digital assets in increasingly sophisticated ways,” Jon Ballis, the firm’s chair, said in a statement. “Our teams already have been operating collaboratively across these areas for the past few years, but now bringing these practices together under the ‘real assets’ umbrella will formalize our approach — highly coordinated advice across capital raising, structuring, financing, development and governance — particularly for assets with long time horizons, regulatory considerations and complex stakeholder dynamics.”
Kirkland's new group is designed to help with staffing and strategy behind-the-scenes. As more business is generated at the intersection of various practices, there’s more clarity and less friction about who is able to pick up and work on those deals.
Getting partners across disciplines more familiar with each other as their work more frequently collides also doesn’t hurt. When pitching clients, very often firms that can demonstrate their bona fides end up winning the work. It’s one thing to hear an M&A partner talk about doing deals with real estate-facing components; it’s another when the real estate partner who lives and breathes it is in the meeting, too.
In an interview, John Pitts, a partner in energy and infrastructure and an executive committee member at Kirkland, said having deeper specialization leads to a deeper appreciation for growth opportunities, and in a way, can help the firm pivot when the market changes.
While AI and data centers are the hot, high-growth market now, he said, things can always shift. The emphasis could change from data centers to GPUs, for instance. “We have to be ready for the market to be completely different next year. That’s why you want deep specialization.”
The new practice approach is also viewed as a way to help recruit top talent. Pitts said that while the firm will maintain its philosophy of trying to hire the best talent possible, wherever they are, lateral partners with skills or experience in areas under the real assets umbrella will be in demand.
“If there are people in the market out there we think highly of, that are multi-tool players that we think can do these kinds of deals, they’re likely to be very, very attractive to us,” he said.
Kirkland pointed to deals it has already led involving semiconductor facilities, power generators, retail properties and, particularly, data centers, noting it worked on about 615 deals involving real assets last year totaling around $650 billion.
Those include Brookfield Infrastructure Partners’ $30 billion joint venture with Intel to fund the latter’s semiconductor fabrication facility in Arizona; Constellation Energy’s $26.6 billion acquisition of Calpine, to create the largest independent power generator in the U.S.; and Ares Management Corporation’s merger with Whitestone REIT, whose portfolio includes convenience-focused retail properties, a deal valued at $1.7 billion.
The real assets banner also includes data centers. The firm said it has advised on more than 450 data center transactions over the last five years, including a $40 billion acquisition of Aligned Data Centers, the largest ever acquisition in the digital infrastructure realm.
