Private equity firm New Mountain Capital makes a significant minority investment in Appleby, aiming to accelerate the offshore law firm’s growth strategy. Ropes & Gray, Simpson Thacher and Addleshaw Goddard provided legal advice on the investment for an undisclosed amount.
David Bulley, Appleby’s Asia managing partner and head of its corporate and restructuring practice in Asia, told China Business Law Journal: “The investment will provide Appleby with a significant amount of capital, which we can deploy globally to not only invest in technology and innovation but also to invest in new offices, service lines and continue to attract the leading lawyers to our market leading team.”
“In terms of China, we are already the largest offshore firm, with offices in both Shanghai and Shenzhen. There are time requirements under MoJ [Ministry of Justice] rules in terms of opening new offices in the Chinese mainland, but what I can say is that I expect to continue to see significant investment in the teams across Hong Kong and [the Chinese mainland], particularly on the back of six consecutive record financial years for Appleby in Hong Kong and [the Chinese mainland], which has seen us outperform every other competitor in this region.”
Following completion of the investment, Appleby would continue to be led by its existing management team and partners, who would remain the majority owners, said the joint announcement from the law firm and New Mountain Capital.
Appleby group managing partner Malcolm Moller will become chief executive officer on completion of the transaction. Financial details and a completion timeline were not disclosed.
Ropes & Gray advised Appleby with private equity partners John Newton and Shona Ha leading the team, with the support of finance partner Greg Bauer; tax partners Chris Agnoli and David Saltzman; litigation and enforcement partners Lisa Kaltenbrunner and Sean Seelinger; and data, privacy and cybersecurity partner Rohan Massey.
Simpson Thacher and Addleshaw Goddard counselled New Mountain Capital. The Simpson Thacher team included partners Clare Gaskell, Nick Appleton, Benjamin Schaye, Timothy Gaffney, John Ilardo, Dan Peach, Elizabeth Kates, Abram Ellis, Emma Rachmaninov, Étienne Renaudeau and Andrew Purcell. Addleshaw Goddard’s team was led by partner Jon Cheney and included partner Jonathan Cakebread.
Appleby currently has 11 offices across eight jurisdictions, including two in the Chinese mainland and one in Hong Kong. Its other offices are in major offshore financial centres, including Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Mauritius and the Seychelles.
New Mountain Capital will acquire a minority stake in a newly established Cayman Islands company that will indirectly own Appleby Global Group. In compliance with local regulations, Appleby Global Group serves as both a managed services organisation for Appleby’s law firms and the owner of the Appleby Global Services entities.
In an August Financial Times report, prominent US law firms including Paul Weiss, Quinn Emanuel and Proskauer Rose had approached private equity firms and bankers to explore investment opportunities.
As US regulations prohibit non-lawyer ownership of law firms, the legal sector has remained one of the few areas largely untouched by private equity. The report identified managed services organisations – which separate a law firm’s legal services from its administrative functions – as one structure through which investors had been seeking to enter the legal sector.
Founded in 1999 and headquartered in New York, New Mountain Capital manages around USD60 billion in assets across private equity, credit and net lease real estate strategies. The firm focuses on non-cyclical sectors such as healthcare, software, business services and data analytics. Its founder and chief executive officer, Steve Klinsky, was among the founding members of Goldman Sachs’ original private equity group.
