Investment in Weil, Gotshal & Manges’ City arm has long come in fits and starts, avoiding broader M&A ambitions to become a well-regarded private equity player, while arguably being outpaced by US rivals Kirkland & Ellis, Latham & Watkins and Simpson Thacher & Bartlett. Questions also linger around who will lead when Mike Francies, its veteran London managing partner, steps down. Is the recent flurry of laterals evidence that Weil is ready to seize the City breakthrough that has long looked frustratingly just out of reach?
For critics, the firm has only itself to blame as Weil has long been held back in London by a lack of cohesion or vision about where to take the practice, even as a group of US rivals have steamed ahead in the last five years. Notes one former partner: ‘Someone senior told me years ago: “We’re not a partnership, we’re a group of individuals who choose to work together.” In the States, it was a restructuring firm and people used to call it “We’ll Get You and Mangle You!”’
Drivers of success, the ability of larger-than-life rainmakers to forge relationships with clients, can even become a drawback. Marco Compagnoni, Weil’s indomitable co-head of private equity, is cited as an example of how a stellar operator can overshadow juniors coming up the ranks. Compagnoni’s robust approach also presents a challenge to bringing in other prominent deal hires, who are not up for playing second fiddle. In this context a relative lack of external profile for the well-liked private equity partner Jonathan Wood is unhelpful in fostering Weil’s reputation as more than The Marco Show.
Despite such reservations, Weil UK has been on strong form of late. In 2013, London generated $110m. That went up to $188.1m in the last financial year.
‘Mike Francies is an impressive operator. If he’s going to hand the crown jewels to David Avery-Gee, that’s a good move.’
Partner retention has been respectable at Fetter Lane, with only four partner departures in the last two years, albeit one was the right-hand woman to Francies, Sam McGonigle, who left to join a fund in February 2019. Also a reverse was the loss of banking head Mark Donald in 2018, though the hire by White & Case eventually fell through due to conflict issues. Looking further back, there is still much talk of the headline-grabbing loss of banking chief Stephen Lucas to Kirkland & Ellis in 2014, a move that foreshadowed the latter firm’s ambition to build a broader City platform. Weil at least maintains a lean but effective deal finance operation thanks to good mid-vintage partners like Tom Richards, Chris McLaughlin and Reena Gogna.
If such considerations are somewhat historic, 2019 did at last provide evidence that Weil was stepping up investments to keep pace with more aggressive rivals. The year saw five new laterals, including most notably Linklaters corporate partner David Avery-Gee in November 2019. Even at 63, Francies shows no sign of hanging up his gloves, but the infusion of high-profile general M&A partners like Avery-Gee sends a strong signal that the firm is thinking about the future. Notes one partner at a rival City firm: ‘Mike is highly regarded, a super guy and impressive operator. If he’s going to hand the crown jewels to David, that’s a good move.’
The big question is how successful Avery-Gee will be at building a general M&A business given Weil’s relatively narrow City practice and the challenge of prising institutional clients from Silk Street, but it remains for now a welcome statement of intent.
Other laterals have been a boost for plans to build out the London platform, with real estate partner Anthea Bamford joining from Bryan Cave Leighton Paisner in February 2018 and private equity lawyer Mark Thompson from Sidley Austin in February 2019. Ashurst banking partner Paul Stewart, restructuring partner Neil Devaney from Akin Gump Strauss Hauer & Feld and tax lawyer Jenny Doak from Vinson & Elkins were all hired in November 2019.
Four newly-promoted City partners for private equity, restructuring, tax and funds was an increase on the three promoted the previous year and means Weil has expanded its London partner ranks in the last year from 33 to 40 partners as of 1 January 2020.
The restructuring hire and promotion also go some way to answering claims that the UK practice mix is too heavily weighted towards private equity. The restructuring team, led by the effective Adam Plainer and including notable partners Alex Wood and Andrew Wilkinson, has been responsible for generating more than 20% of the office’s turnover in the last year. Good progress, but given the strength of Weil’s peerless US business, a lot more could have been done in the City restructuring scene with further investment.
Elsewhere, there has been an impressive string of mandates, including banking partner Richards and private equity partner Wood advising repeat client Advent International on the debt underpinning the £4bn take-private of Cobham, albeit the lead roles were taken by Allen & Overy advising Cobham and Linklaters leading for Advent. A deal influx has also seen the private equity team advise PSP Investments in a consortium on the €9bn acquisition of Nestlé Skin Health, Bain Capital on its acquisition of a 60% stake in Kantar from WPP, valuing the business at around $4bn, as well as Ontario Teachers’ Pension Plan in a consortium on the £4.2bn take-private of Inmarsat.
There has been progress – the firm’s City work is consistently ahead of its accepted reputation – but Weil has yet to prove it has a thought-out plan for the City beyond hire-good-guys. And good guys alone won’t be enough to cut it in the 2020s.