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Freshfields and Latham act on creation of new PE house as Barclays spins-off another venture

Private equity heavyweights Freshfields Bruckhaus Deringer and Latham & Watkins have acted on the spin-off of Barclays’ natural resources private equity arm through a management buyout.

Barclays Natural Resources Investment has been bought by its managers, led by chief executive Mark Brown, after being placed into Barclays’ non-core asset pile following a restructuring of its investment bank last year.

The profitable unit, which has 14 staff operating out of London, New York and Doha, has an existing $1.7bn under management, including investments by the Qatar Investment Authority and by Barclays itself.

The renamed Global Natural Resource Investments (GNRI) instructed Latham & Watkins’ global co-head of private equity David Walker to lead on the spin-out and is already planning to raise a standalone fund of over $1bn.

Walker picked up the deal following his work back in 2011 on an earlier Barclays spin-off, Barclays Private Equity, which became buyout firm Equistone, while he was at Clifford Chance. For the GNRI transaction, Walker led a team comprising funds partners Nick Benson and Tom Alabaster, tax partner Sean Finn and employment partner Catherine Drinnan. 

Freshfields partner Karen Fountain, who has since retired, led the legal advice to Barclays. She was supported by corporate partner Philip Richards.

The management buyout ends another legacy of Barclays’ former chief executive Bob Diamond who encouraged the launch of the unit in 2006, shortly after becoming chief executive, to aggressively expand Barclays’ investment banking arm.

Brown said: ‘As an independent manager, we believe there is a demand for a private equity business that is focused on global natural resources, excluding upstream oil and gas in the US. In addition, we believe that the requirement for private equity capital in the global natural resources sector is stronger than ever and the current volatility in commodity prices is creating a positive back-drop for patient private equity.’