JUVE Law Firm of the year

Private Equity and Venture Capital

More difficult market for PE investors

The strong economy and large cash piles in the coffers of strategic investors have made life difficult in the private equity market. Asset prices are high, and expectations of rate-of-returns at PE houses means that they have often lost out on important tenders. PE houses traditionally associated with large-cap transactions have been reaching down into the mid-market and competing for assets which they would not have considered a few years ago. In addition, big names in the PE industry have set up infrastructure or growth funds which also provide competition to the established financial investors in those segments.

Greater breadth required

The competition for assets means investors are always on the lookout for suitable niches and specializations and this also has consequences for PE lawyers. Those law firms with strong institutional relationships to the big names in the industry – KKR, Blackstone, EQT, Permira – have seen the breadth of their activity expand almost automatically. Those firms advising only mid-cap funds have had to follow their clients into more specialized situations (restructuring, company succession, particular sectors) which itself demands more specialist expertise.

VC lawyers have not had to deal with any similar developments in their market. Berlin remains the center of activity since software investments have now clearly overtaken the technology and biotech startups more traditionally associated with Munich. The growing interest from investors in the US and other countries such as Israel means that good ties to a firm’s own offices or best friends in those places are becoming more and more of an advantage. In addition, more and more companies have their own VC funds (so-called “corporate VC”); advice to these can often open the door to larger instructions.

US firms bulk up

The shift in power in the PE market is also reflected in the advisors. The major lateral moves have been with US firms: Dr. Rainer Traugott’s move from Linklaters to Latham & Watkins was the biggest shock, but Latham & Watkins also lost two of its best-known transactional lawyers to Gibson Dunn & Crutcher.

Freshfields Bruckhaus Deringer’s restructuring of its PE practice also raised eyebrows: the loss of Düsseldorf partner Dr. Anselm Raddatz to Clifford Chance led indirectly to the decision to gather the PE partners under fewer roofs and to increase specialization. Dr. Ludwig Leyendecker and Dr. Kai Hasselbach moved to Munich which now finally has a PE presence to match those of Hengeler Mueller, Milbank Tweed Hadley & McCloy and now Kirkland & Ellis.



Private equity includes all kinds of activity in the fields of venture capital and risk capital, be it advice to private equity houses or capital holding companies on large transactions (large-cap) or midsized transactions (mid-cap). Firms advise either the private equity house, the target company or its shareholders, and these transactions are similar to M&A deals. Due to the increased market segmentation, there are now separate rankings for mid- and large-cap transactions.

Venture capital (VC) is taken to mean the early investment at the beginning of a company’s development (startup or seed capital). Private equity (PE) refers to larger deals, including those with a large proportion of debt finance (leveraged buyout or LBO).

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