After a high-profile tussle and one of the biggest team hires in the City, Sidley Austin has secured the corporate work of key Kirkland & Ellis client TowerBrook Capital Partners, amid claims that Sidley pushed aggressively to secure the work.
The news comes after a six-partner team announced in February it would depart Kirkland and set up a City private equity team at Sidley.
Of the six joiners, corporate partners Erik Dahl and Christian Iwasko managed the TowerBrook relationship while at Kirkland, generating $20m a year – a major chunk of Kirkland’s estimated $180m in City revenues last year. Kirkland advises TowerBrook on the lion’s share of its M&A mandates across Europe.
Some of Dahl and Iwasko’s TowerBrook deals include acting for Braas Monier Building Group, which it bought in 2009 with Apollo Global Management and York Capital Management, on its refinancing, high-yield bond offering and initial public offering in 2014; advising on the sale of the Jimmy Choo group to Labelux Group in 2011; and representing the client on its €443m sale of PolymerLatex in 2010.
The move comes amid claims that Sidley has quoted aggressively on fees to successfully secure the transfer of work despite a last-ditch effort by Kirkland to retain a least a chunk of its mandates.
‘I have never seen anything like this before,’ said one City private equity partner. ‘Moving a client into a non-full-service start-up is always risky. [Sidley] is saying “take a punt on us for a year and see how it works”.’
Another added: ‘I was surprised to hear this. TowerBrook is an active client and they are clearly buying the business.’
However, George Petrow, who co-heads Sidley’s finance practice, said in a statement that assertions that clients set to follow the Kirkland team would ‘enjoy a more generous fee arrangement’ were ‘untrue’. TowerBrook declined to comment.
Sidley has clearly made every effort to bolster its newly-launched deal team. Of the six partners joining, private equity partner Fatema Orjela, banking partner Bryan Robson, corporate partner Sava Savov and tax partner Oliver Currall are all understood to have joined Sidley on salaries between $1m and $1.5m. Dahl and Iwasko on the other hand are on financial guarantees of $5m. Sidley last month bolstered its leveraged finance team with the hire of Willkie Farr & Gallagher partner James Crooks.
The firm also hiked the pay of seven associates to secure the recruits. It is understood that one-year post-qualification experience (PQE) associates will see wages rise from £95,000 to £105,000 while two years’ PQE will see pay packets increase from £105,000 to £115,000. Associates with three years’ PQE will take home £129,000, an increase of £14,000.
Sidley, which has historically focused on structured finance in the UK, is also in the process of launching a Munich office, mainly to service Dahl’s clients, despite axing its Frankfurt office in 2014 following a spate of partner exits that put the office under a review in 2013. Dahl worked out of both London and Munich while at Kirkland.