2023 has been mostly unkind to deal markets. High interest rates and inflation have driven funds to explore growth sectors that in years prior they wouldn't have had much to do with.
There's been plenty of talk among law firm leaders, particularly Stateside, about the dramatic pivot by private equity houses away from traditional sectors to infrastructure, private credit and tech. And these seem to be the deals making headlines right now.
Last week, a who's who of top law firms converged on what appears to be the biggest deal of November, as a private equity consortium made up Permira and Blackstone, together with fellow private equity firms General Atlantic and TCV, targeted the Ebay-backed digital marketplace business Adevinta for around €14 billion. Firms like Skadden, Arps, Slate, Meagher & Flom, Freshfields Bruckhaus Deringer, Wachtell, Lipton, Rosen & Katz, Latham & Watkins and Cleary Gottlieb Steen & Hamilton took a piece of the action alongside several other legal elites.
Lucky Skadden also had a hand in a more traditional $1.8 billion deal that sees Philippines company Aboitiz Equity Ventures and Coca-Cola Europacific Partners jointly acquire Coca-Cola Beverages Philippines from The Coca-Cola Company.
Other big deals over on the energy-infrastructure side include Norwegian company Statkraft's €1.8 billion acquisition of Spanish engineering company Elecnor Group's renewables business, Enerfin. The deal was significant for the likes of Herbert Smith Freehills and its Spanish counterpart Pérez-Llorca.
HSF also acted on yet another $1.8 billion deal, this time in the mining sector, alongside White & Case, as Chinese-owned MMG Limited acquired Canadian company Cuprous Capital, which owns the Khoemacau copper mine in Botswana.
But, if private equity leaders are to be believed, we can expect to see a rise in private credit work—that is, PE houses offering multi-billion dollar corporate loans to fund buyouts of companies as well as offering direct lending. One such example from last month was Apollo's $1.5 billion loan to an Air France-KLM affiliate.
Earlier this year, my Stateside colleague Patrick Smith wrote about how the rapid expansion of the private credit deal market has led law firms to stock up on talent in the area. And we can expect to see a whole lot more hiring movement in 2024 as firms look to grow their private credit benches. This year we've already seen firms like Akin, White & Case and Reed Smith add private credit firepower through key hires.
After all, as Patrick explained, for those law firms well positioned to do the work, private credit deals have provided a key support for firms amid a dearth of M&A and capital markets work that has beset Big Law for the best part of two years...
