Most Highly Regarded Firms: Illinois 2006 - Private Funds

From its inception a little over 40 years ago, the private funds industry has proved to be dynamic, characterised by rapid evolution and increasing sophistication. Convergent investment products are being developed to maximise profitability and offset risk in even the toughest economic climates.

Correspondingly, from the outset, advisers to the industry have had a varied legal skill set, ranging from transactional mergers and acquisitions, corporate tax and capital markets to commercial litigation. The Chicago firms listed here have built and developed their investment funds practices according to the miscellany of knowledge bases required by their clients. In this chapter we focus on those with a proven track record in fund formation. 

If Chicago is the ‘cradle’ of private funds, then it would be no exaggeration to refer to one firm in particular as the nursery of legal talent in this field. Since the early 1970s, Kirkland & Ellis LLP has pioneered approaches to fund formation and regulation, and today has a national team of 75 lawyers devoted to a burgeoning industry. The firm’s Chicago team was active on behalf of the buyer and the seller in five of the 25 biggest deals of 2005, representing Bain Capital Partners, TransWestern Holdings LP and Cornerstone Brands. Our research identifies four specialists whose contributions ensure that Kirkland & Ellis continues to merit its status as a true authority on fund formation. Jack Levin brings well-publicised credentials in transactional work, tax and litigation to direct a multidisciplinary practice, with representative assets raised in the past 10 years exceeding US$125 billion. Levin’s manual to mergers and acquisitions work is republished annually and is still widely consulted by students and transactional lawyers alike: according to one respondent, he “wrote the Bible [on this subject] – chapter and verse!” Chris Kallos is a “tenacious and industrious” lawyer, and adjunct professor of law at Northwestern University Law School. In the year immediately preceding this book’s publication, Kallos had represented sponsors in the formation of funds with assets in excess of US$11 billion. Highlights during the same period include fund formation on behalf of Madison Dearborn Capital Partners, Lake Capital Partners and Water Street Capital Partners (in Chicago), and Vestar Capital Partners in New York. To date, he has participated in the formation of funds with a combined value of over US$25 billion. Partner Kevin Evanich acted for client GTCR Golder Rauner LLC (part of a consortium of buyers including Goldman Sachs Capital Partners and Hunter’s Glen Capital) in the acquisition of Ford Motor Credit (Triad Financial), in what transpired to be the eighth-largest deal of 2005. In February 2006, Evanich closed another deal on behalf of GTCR, concerning the US$200 million purchase of EK Success, and in March 2006, he represented the buyer, Goense Bounds & Partners, in its acquisition of Capital Drywall, for an undisclosed value. Kirkland & Ellis can also call on the services of Bruce Ettelson, who, as a prolific writer and speaker in the legal community, “shows total command of his practice area”. In addition to this, he has built an “admirable” practice focusing on the formation and management of over 100 private funds, representing such names as AEA, Bear Stearns Merchant Banking and Nautic Partners. Ettelson completes the contingent from Kirkland, which was frequently mentioned to researchers in superlative terms; in our poll of Chicago’s most admired firms, Kirkland also emerged as the most respected investment funds practice in the city. 

Sidley Austin LLP fared well in our poll of Chicago investment funds practices, and with two attorneys listed in the following pages from a practice that participated in three of the 25 most valuable transactions in 2005, the firm clearly has considerable market presence. William Kerr and David Sawyier represent a fund formation network, stretching as far as the promising financial frontiers of Hong Kong, Shanghai and Beijing, and including the newly opened Frankfurt branch. Respondents drew our attention to the firm’s additional expertise in hedge funds, a market for which it was ideally suited with its background and resources in futures trading. 

Winston & Strawn LLP is another firm with two successful nominees. There, Wesley Nissen and Richard Ginsberg were warmly praised for their breadth of experience and depth of knowledge. Ginsberg has acted for clients such as Bank of America Capital Corporation and LaSalle Investment Management. Nissen can boast considerable experience in transactional mergers and acquisitions within the financial services industry, as well as fund formation and commodities expertise. 

Two of the four remaining nominees in this section spent their early careers at Kirkland & Ellis LLP: David Matteson of Gardner Carton & Douglas LLP “excels at commodity fund formation”, in the words of one admiring respondent; and Timothy Bryant of McDermott Will & Emery LLP also performed well in the research. Bryant is noted for his experience in both fund formation and transactional work, and enjoys a high profile as a frequent speaker and writer in those fields. 

Mayer Brown Rowe & Maw LLP is represented by John Noell, who was previously general counsel at JMB Institutional Realty and Heitman Capital Management. Researchers were apprised of his “superb technical intelligence” and “efficiency”. Real estate investment trusts form a significant part of Noell’s practice, building on the expert knowledge he gleaned during his tenure at JMB. In general terms, the Chicago investment fund team was responsible for advising and representing the buyer in five of the biggest local deals of 2005, and with such high market presence it will no doubt be prominent in future editions.

Walter Weinberg is the sole representative from the investment funds group at Katten Muchin & Rosenman LLP. He has over 20 years’ experience of forming funds and structuring transactions and is a member of the National Association of Small Business Investment Companies. The firm has a wellearned reputation for handling complex matters, as evidenced by the February 2005 acquisition of Wausau Financial Systems (on behalf of the buyer, Frontenac Company in Chicago), in which the firm created a multitiered finance structure to maximise tax efficiency. Senior and mezzanine financing was secured from Wells Fargo Foothill and American Capital Financial Services respectively, and equity co-investment from an affiliate of the latter, American Capital Strategies. 

Although Chicago may have been eclipsed by New York in terms of its international funds market profile since its beginnings in the 1960s, its significance should certainly not be understated. Market leaders, discussed above, continue to feature strongly in significant deals, and the founders and stars of these practices have been and continue to be consulted by successive generations of investment funds attorneys. Comparatively smaller practices at competing firms also command a high level of respect for the complexity and sophistication of their work.

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Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.

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