The pending retirement of Skadden, Arps, Slate, Meagher & Flom’s leading figure in the City private equity market Allan Murray-Jones has been one of the worst kept secrets in the buyout industry. With the confirmation that he will retire this year with no clear successor, some pockets of the clubby private equity market have come to the conclusion that one of Wall Street’s top M&A shops is downgrading its private equity practice in Europe to functional coverage rather than core focus.
It’s a claim the US firm has marshalled considerable effort, including client testimony, to deny, though Skadden has so far at least avoided following rivals in bringing in expensive laterals to bolster the area.
Although not in particular renowned for private equity work, Skadden is of course one of the strongest names in transatlantic deal work and recently advised investment house BlackRock on the acquisition of Credit Suisse’s exchange-traded funds division – the first time BlackRock had instructed a US firm on a major European transaction.
The firm has won much of Doughty Hanson’s UK work since recruiting Murray-Jones (pictured) from legacy Lovells back in 2001 – a relationship that Murray-Jones tightly holds, especially through his close-knit relationship with Doughty’s chairman and co-founder Richard Hanson.
While Murray-Jones is to stay on in an of counsel role, Skadden’s attempts to find a full time replacement have been unsuccessful, with Shearman & Sterling’s Mark Soundy and White & Case’s Richard Youle both understood to have to been sounded out. The firm is also said to have been in talks with Ashurst’s former senior partner Charlie Geffen among others.
There have been indications that Skadden balked at the sky-high remuneration packages that are now demanded by brand-name private equity partners in London, which have been driven by predatory recruitment by US law firms.
While co-head of private equity Shaun Lascelles led for BlackRock in its Credit Suisse acquisition, Lascelles has a broader corporate practice that also focusses on cross border M&A.
‘Murray-Jones is the last leading pioneer of private equity of that generation, alongside Adam Signy at Simpson Thacher & Bartlett. It will take a special personality to follow Allan,’ said Ian Bagshaw, co-head of White & Case’s EMEA private equity team.
Another private equity partner at a top UK firm added: ‘Allan’s market reputation is clear cut. He has got a clear personal brand whose primary and only substantial client is Doughty Hanson. Without this Skadden has no real private equity capability in London.’
However, Skadden strongly denies any intention to scale back from private equity in the City, with executive partner Eric Friedman commenting: ‘Skadden’s private equity practice in London and elsewhere is thriving and its expansion is a key focus for the firm. We have more than a dozen private equity clients that we regularly serve from London and many others we advise less frequently.’
The firm’s London office houses around 30 partners, eleven of which, including Murray-Jones, it claims cover private equity on a regular basis.
These includes Lascelles, City head Pranav Trivedi, partners Pete Coulton and Mark Darley in banking, and Jim McDonald in high yield. The firm has previously advised BlackRock, Veritas Capital, Blackstone Group and Castle Harlan.
However, few in the industry would view the firm as being buyout-centric in the cast of a Simpson Thacher, Kirkland & Ellis and Weil Gotshal & Manges.
One managing partner at a rival firm commented: ‘In London, Skadden is more like a Magic Circle firm that does private equity but within a corporate/private equity mix. While US firms have increasingly become the face of private equity, Skadden has remained within the mainstream corporate.’
Certainly as far as Doughty is concerned, Skadden has done enough to institutionalise its relationship and Graeme Stening, Doughty’s general counsel, commented: ‘Whether or not Allan retires, our plans are to continue the mutually satisfactory relationship we have had with Skadden for many years. That relationship is not just with Allan but with many other corporate, banking, tax, and litigation partners.’
The bigger question will be, given Skadden’s stated ambition to expand in the City, if even top advisers can thrive these days without the high-cost divas of the buyout world.