Advising on a renewed frontier

Despite the travails previously experienced in Latin America by both GPs and LPs, some key areas in the region are showing signs of recovery, and a number of recent deals have shown outsized returns..

Paul Schnell and Jonathan Bisgaier, both partners with the M&A group at law firm Skadden, Arps, Slate, Meagher & Flom, have been in the thick of the action, advising private equity clients on both entering and exiting this renewed frontier. Their interest in the region carries on from years of advising M&A transactions in the region, and both Schnell and Bisgaier recall well Latin America's glory days, when the region attracted copious amounts of capital in the 1990s.

The duo recently advised the Azout family of Colombia on its exit from the country's second-largest retailer – Carulla Vivero. In the same transaction, the Azout family's long-time partner ACON Investments, a private equity firm affiliated with Texas Pacific Group, earned four times its investment in the transaction that valued Carulla Vivero at $700 million plus debt, reported sister news service PrivateEquityOnline in August.

While unable to comment specifically on the Carulla Vivero deal, Schnell and Bisgaier did have some broader observations to share on advising transactions in Latin America.

Among the advice Schnell and Bisgaier impart to their clients is to expect to encounter different types of contracts than those usually seen in the US. ?To this day, even when there are a number of international investors and bidders, there are still cases where the target company will serve up a non-US type purchase agreement that contains very few of the protections that a buyer would typically get in a US-style contract,? says Schnell.

For instance, contracts in Latin American transactions often provide few reps and warranties and little or no indemnification, so a buyer has to accept a different allocation of risk. ?In some ways, the [Latin America] deals are like the public US deals – you don't get indemnity when you take private big US companies,? says Bisgaier. ?Private equity is used to taking this risk in the States, but in a very different context.? Schnell notes that, given the limited remedies buyers sometimes have against sellers, ?We advise our private equity clients to be as thorough as possible in their due diligence. Increasingly, sellers in Latin America are accepting the need for US-style diligence.?

Both Schnell and Bisgaier emphasized that accessing Latin America opportunities is in many ways not all that different from investing in the developed markets. ?It's equally as sophisticated as what they are doing in the US – sometimes even more sophisticated because of cultural issues, the need to negotiate a shareholder agreement with local partners and a sometimes difficult regulatory approval process,? says Bisgaier.

Nixon Peabody scoops PE talent from O'Melveny
James Kelly has joined Nixon Peabody as a partner on the law firm's private equity team. He is based at the firm's New York office and focuses on private equity, M&A and leveraged buyouts. Previously with O'Melveny & Myers law firm, Kelly's practice includes domestic and multinational M&A, recapitalizations, restructurings, and representing private equity firms in buyout bids and organizing club bids. ?James will contribute to Nixon Peabodyadditional leveraged buyout experience and knowledge, and will further enhance the depth of skill of our Private Equity team,? said Richard Langan, Jr., a partner and chair of Nixon Peabody's Business and Finance department, in a press statement. The firm's private equity group comprises over 55 attorneys who provide services in fund formation, management, and transaction representation.

Lovells makes two hires for London
Lovells, an international law firm, has appointed private equity lawyers Tom Whelan and Stephanie Keen as it rebuilds its London practice following the departure of private equity head Marco Compagnoni in February. Whelan joins Lovells from the London office of DLA Piper Rudnick Gray Cary, where he was a partner. He started his career at Ashurst in 1991 before joining DLA Piper in 2002. Keen comes to Lovells from Fried Frank Harris Shriver & Jacobson's London office, where she is a senior associate. She also began her career at Ashurst, which she joined in 1996 before moving to Fried Frank in 2004 as part of the firm's cross-border private equity team.

Byrne to head Clifford Chance biz development
Clifford Chance, a global law firm based in London, has appointed David Byrne to lead the business development and marketing of the firm's finance and capital markets practices. Byrne joined Clifford Chance on September 4 and will manage the business development and marketing teams based in London, as well as head up the global business development and marketing efforts for these two practices. He was most recently at Linklaters, where Byrne led the marketing and business development for the law firm's finance division. He was also responsible for the firm's key client account management program, aimed at the banking space. Byrne was also previously at Barclays and Barclays Capital, holding sales and marketing positions for areas including private equity, offshore banking, corporate finance and private client banking.

Latham & Watkins lures German partner
International law firm Latham & Watkins has appointed Christina Ungeheuer, a partner in the leveraged finance group at Milbank, Tweed, Hadley & McCloy, to its Frankfurt office. She is expected to join Latham & Watkins this year. At Milbank Tweed, Ungeheuer has advised private equity firms and investment banks on a number of transactions and syndicated loans. Before Milbank Tweed, she was a partner in the banking and finance department of Baker & McKenzie. Hans-Jürgen Lütt, managing partner in the Frankfurt office of Latham & Watkins, said that Ungeheuer's appointment will bring the number of finance lawyers in Frankfurt to approximately 15.

Simpson vet now at First Reserve
Alan Schwartz, formerly a M&A and leveraged buyout pro at law firm Simpson Thacher & Bartlett, joined First Reserve earlier this year. Schwartz is now a managing director at the energy-focused midmarket buyout firm, where his duties include structuring, diligencing and monitoring investments. His responsibilities also include coordinating with external legal advisors, as well as deals where legal compliance issues arise. Before joining First Reserve, Schwartz was at Simpson Thacher for 17 years where he was a partner in the corporate and energy practices. Schwartz earned a JD from Fordham Law School and a bachelor's degree from the University of New Hampshire. First Reserve has offices in Greenwich, Connecticut; Houston and London. The firm also hired general counsel Anne Gold from the transactions practice of Morgan, Lewis & Bockius in 2005. Gold advises First Reserve on legal issues relating to its funds, including compliance and fund formation.

Thelen Reid sets up Shanghai shop
Law firm Thelen Reid & Priest has expanded its presence to Asia by opening an office in Shanghai. The new Shanghai office currently houses two full-time partners, Tom Shoesmith and Meg Utterback. Shoesmith has been residing in Shanghai since 2003, and his expertise includes M&A, private equity, VC, international joint venture, foreign direct investment and corporate governance. He is managing partner of the Shanghai office. Meanwhile, Utterback's focus is on helping foreign companies set up manufacturing facilities in China. ?The firm has been preparing itself for the formal launch of its Shanghai office for more than two years,? said Shoesmith in a press release. ?Officially opening our doors in Shanghai will allow us to expand our practice here as well as provide a solid platform for the growth of the firm's practice throughout Asia.? Prior to setting up the Shanghai office, Thelen Reid's physical presence had been limited to six offices within the US.

DLA Piper ups China talent, shortens name
Law firm DLA Piper has hired Ming Zu as a senior China corporate law specialist based in the firm's Shanghai office. Zu's title is senior consultant, and as such, he will be involved with DLA Piper's expanding foreign direct investment practice. He will leverage his experience in representing multinational clients on setting up and operating foreign investment enterprises and investment vehicles in China. Prior to joining DLA Piper, Zu was most recently at the Shanghai office of Allen & Overy. He earned an LLM from the University of London. DLA Piper also announced on September 4 that it has shortened its name from DLA Piper Rudnick Gray Cary, twenty months after the merger of law firms Piper Rudnick, Gray Care Ware and Freidenrich and DLA. The firm's Shanghai office houses three partners, a senior consultant (Zu) and a consultant.

Arnold adds Asia talent
Thomas McLain has joined Arnold & Porter as a partner at the law firm's Los Angeles office. His expertise includes international transactions, including the establishment of entertainment venues in Japan and elsewhere in Asia. ?Tom's experience will expand our West Coast transactional capabilities, which are integral to our national corporate, private equity and intellectual property transactional practices,? said Ronald Johnston, the head of Arnold & Porter's LA office. ?In addition to his work in Asia, Tom's significant experience in domestic hedge fund and private equity matters dovetail with our substantial East Coast practice in these areas.?

Freshfields grows Dubai team
International law firm Freshfields Bruckhaus Deringer has transferred corporate partner Bruce Embley to its office in Dubai. Embley was previously based at the firm's London office but has advised a number of high profile deals in the Middle East, such as MTN's offer for Investcom, the acquisition of P&O by Dubai Ports World, and the acquisition of Doncasters by Dubai International Capital. ?Bruce has a wealth of experience in the Middle East and we're pleased to have him based here full time to lead our corporate practice in the region,? said Joe Huse, managing partner of Freshfield's Dubai office, in a firm statement. The firm's Dubai office serves as a platform for its legal advisory work across the Middle East.