Hello and welcome to the Fides Weekly Update. Read to learn more about the main legal and compliance news stories of the week and don’t forget to check out our Movers & Shakers of the week.
To celebrate International Women’s Day that took place this week, Researcher Emily Clews has written a blog that discusses this year’s Bold for Change theme, and the steps that corporate organisations have taken in improving gender equality in the workplace and what law firms can take from these approaches. Click here to take a look.
1. Merger creates second largest European asset manager
A merger that will form the UK’s largest fund manager was announced on Monday, causing share prices to soar for the two companies and creating an outfit with £660bn assets under management (AUM).
After six weeks of discussions, Standard Life and Aberdeen Asset Management have agreed to join forces, with Standard Life investors expected to hold two-thirds of the group and Aberdeen Asset Management one-third. The deal as a whole is valued at £3.8bn.
Originally known as a life insurer, Standard Life has focused more of its efforts on asset management over the last few years. This deal will certainly help the company establish itself further as an asset manager and allow themselves to compete with the larger US outfits, such as BlackRock and Vanguard.
The deal comes at a crucial time for both companies, as Standard Life attempts to shake off poor outflows and a similarly weak performance of their market leading Gars (Global Absolute Return Strategies) product last year. Meanwhile Aberdeen have also been hard hit, seeing their 15th consecutive quarter of net outflows whilst their emerging markets-focused strategy strains with declining interest from investors.
It has been widely considered that this merger is a defensive move against an industry shift towards passive fund management. Active managers are facing high pressure competition from index-tracking passive funds, which run much lower cost bases and are currently proving more popular in the marketplace. With both Standard Life and Aberdeen operating as active fund managers, the deal will create one of the world’s largest active fund management firms and perhaps inject some disruption into market trends by delivering the size and scope to compete with the cheaper index-tracking rivals.
That being said, with mounting regulatory challenges and fee pressures, the asset management industry is in the midst of significant change, and the new entity has suggested major cost-cutting over the next few years. Job losses are expected at the two Scottish firms whilst overlaps from each of their central functions will need to be streamlined. Hargreaves Lansdown has also indicated that the main source of growth for the firm will come largely from cost savings.
Consolidation is a key trend for the industry at the moment, with one example being the recent merger between UK investment manager Henderson and US counterpart Janus Capital. This level of M&A activity is expected to rise as funds continue to struggle to compete with low fees and consistent returns. With an FCA crackdown of the asset management industry also on the horizon, firms are clearly gearing up for what could be defined as a turning point in the UK asset management industry.
Movers & Shakers of the week:
Facebook hires Olswang partner as EMEA head of regulatory and litigation
City litigation partner Anna Caddick joins Olswang client Facebook to head up its regulatory and litigation teams in Europe.
Slaughters appoints three new leaders for key practice groups
Slaughters announce Sarah Lee, David Ives and Charles Cameron as the new practice heads for dispute resolution, IP/IT and pensions and employment.
Eversheds Sutherland appoints new leaders for corporate and human resources groups
Eversheds Sutherland has appointed new leadership for two of its practice groups, with corporate partner Keri Rees taking over as company commercial head from Keith Froud, and Diane Gilhooley replacing longstanding human resources head Martin Warren.
Linklaters promotes new global head of real estate
Head of UK real estate Andy Bruce has been appointed as Linklaters new global head of real estate to succeed Yves Moreau
Former Linklaters senior partners Elliott to chair Irish Bank
Robert Elliot has been appointed as the next chairman of Irish bank Permanent TSB Group Holdings.
Wells Fargo appoints top Cravath partner as new GC
Former Cravath Swaine & Moore presiding partner Allen Parker has been named as the next GC for Wells Fargo & Co.
RPC GC consulting head quits to join e-discovery firm
Former T-Mobile GC Julia Chain, and head of RPC’s in-house consultancy arm, is to leave the firm to join e-discovery and legal document services firm Millnet, alongside two other members of RPC’s consulting team.
Fourteen-lawyer London private client team leaves Gowling WLG for Forsters
Gowling WLG’s 14-lawyer City private client team is to join Forsters on the 1st May. The team includes four partners – Anthony Thompson, who heads Gowling WLG’s private client team, Catharine Bell, Nick Jacob and Daniel Ugur – as well as 10 solicitors and five other members of staff.
Boies Schiller hires HSF’s global head of public international law
US litigation firm Boies Schiller & Flexner has hired Herbert Smith Freehills global head of public international law Dominic Roughton for its London office.
Latham’s hires Linklaters financial regulatory partner
Partner Daniel Csefalvay joins Latham’s financial institutions group.
Kirkland & Ellis Hong Kong heavyweight Tsun resigns
Kirkland & Ellis equity capital markets partner Dominic Tsun has resigned from the firm’s Hong Kong office after almost six years at the firm.
Linklaters hires US Department of Justice heavyweight in Washington DC
Linklaters has strengthened its US disputes practice with the hire of Matt Axelrod, former principal associate deputy attorney general at the DoJ.
Office Openings & Closings
Ropes & Gray to spin off 100-strong patent prosecution team
Ropes & Gray is to spin-off its patent prosecution practice into a new firm – a move that will affect around 100 lawyers and staff.
PwC launches Hong Kong legal practice with KWM and O’Melveny partner hires
PwC has launched a Hong Kong legal practice with the hire of former KWM Beijing partner David Tiang, and O’Melveny & Myers counsel Joyce Tung. The firm is to be called Tiang & Co, which will enter into an association with PwC’s Singapore licensed foreign law practice, PwC Legal International.
DLA Piper combines with Portuguese alliance firm
DLA Piper has continued its European expansion by combining with its Portuguese alliance firm ABBC.