Axelrad, Fore jump ship

Venture capital fund formation luminaries Jonathan Axelrad and Robert Fore have left Wilson Sonsini Goodrich & Rosati for Goodwin Procter.

Silicon Valley law firm Wilson Sonsini Goodrich & Rosati has lost Jonathan Axelrad and Robert Fore, the co-heads of its fund service practice, to law firm Goodwin Procter.

The departures come amid option backdating scandals that have affected Wilson Sonsini’s clients, including Apple Inc and Brocade Communications.

Counsel Gerald Chacon Jr. will follow Axelrad and Fore to Goodwin Procter. The trio are noted venture capital fund formation lawyers whose clients include major Silicon Valley private equity firms Sequoia Capital, Clearstone Venture Partners, Mayfield, Palomar Ventures, Rho Ventures, Storm Ventures, Trident Capital and VantagePoint Venture Partners.

According to a press release, Axelrad, Fore and Chacon’s practice, combined with Goodwin Procter’s involved almost 20 percent of all the new capital commitments made to venture capital funds in 2006.

The hires come as part of Goodwin Procter’s effort to build a bi-coastal practice in the US. The Boston based law firm has opened five offices in California in the last 18 months; the Palo Alto office, where Axelrad, Fore and Chacon will be based, opened in June 2007.

“We will continue to invest in and develop resources in those geographic and practice areas that provide the greatest value to our clients. We have made a significant investment in California and are committed to growing on the West Coast as strategically and focused as we have on the East Coast,” said Regina Pisa, chairman and managing partner of Goodwin Procter, in a statement.

In 2005, Goodwin Procter added nearly 100 attorneys from Testa Hurwitz & Thibeault when it dissolved as a partnership. Testa Hurwitz was among the top law firms for East Coast venture capital.

Now over 200 of Goodwin Procter’s 850 attorneys focus on technology, life sciences, private equity and venture capital.

The departures of Axelrad, Fore and Chacon come on the back of investigations into backdating scandals at some of the technology firms that have been advised by Larry Sonsini, chairman of Wilson Sonsini. Sonsini sat on the board of Brocade Communications, one of the first companies to be investigated for backdated share options.

He is also alleged to have advised on the share option grant to Steve Jobs at Apple Inc which is also being investigated.

Blackstone hires Deutsche Bank financing pro
The Blackstone Group has hired Deutsche Bank leveraged finance pro Vikrant Sawhney to oversee the financing and capital markets activities of its private equity group. Sawhney, who joins as managing director, has a long history of working with Blackstone. As managing director at Deutsche’s financial sponsors group, Sawhney advised on the financings for Blackstone’s deals including Celanese, Cumulus Media, Houghton Mifflin and Nielsen (formerly VNU), as well as the $11 billion buyout of SunGard Data Systems. “Vik has built a reputation as one of the leading leveraged finance professionals on Wall Street and will further enhance our private equity, client advisory and debt investment capabilities,” said Tony James, president and COO of Blackstone, in a statement. The Harvard-trained lawyer joins a number of pros who are increasingly coming in-house to focus on financing activities at private equity firms. Warburg Pincus hired Christopher Turner from Goldman Sachs to lead its capital markets group and manage the firm’s commercial and investment banking relationships, while Berkshire Partners hired Matthew Janchar from Oak Hill Advisors as its director of capital markets.

CapMan reshapes management group
CapMan plc Group, the Finland-based alternative asset manager, has announced a number of appointments recently to its management team. Kaisa Arovaara becomes CFO after joining the firm in 2006, and is now responsible for the new internal services unit, which consists of the group’s finance, administrative and IT functions. Jerome Boiux has been transferred to the new Unit, which is responsible for fundraising, fund administration, investor relations, communications and product development. Other new members of the management group include Kai Jordahl, senior partner and deputy head of CapMan Buyout, Hikka-Maija Katajisto, group HR director and Martti Timgren, legal counsel. “We have changed our organization to meet the growth challenges in an international company. All of our market areas and operations are extensively represented in the management group. The composition and responsibilities of the strengthened management group are the best fit to CapMan right now and create prerequisites to continue our growth strategy,” CEO Heikki Westerlund said in a statement.

E&Y report touts private equity’s job creation
Global accountancy firm Ernst & Young has reported that private equity firms created jobs at many of the companies they back. A recent study of the sales of 100 portfolio companies in the US and Western Europe in 2006 found that employment at the time of exit was at the same or higher levels as they were at the time of acquisition at 80 percent of the American, and at 60 percent of European companies. According to the study, in the UK, Germany and France, employment rose five percent annually at private equity backed companies, a point likely to be cited by the industry when politicians and labor leaders in these countries warn of their penchant for slashing jobs. Another point likely to be used in ongoing debates over buyouts’ role in these countries is the study found that two thirds of the companies achieved their profit growth from business expansion, with only 23 percent earning those numbers from cost reductions.