JUVE Law Firm of the year

Private Equity and Venture Capital

The German VC market has come of age

It is boom time for lawyers advising financial investors. The VC market is, according to lawyers, “extremely robust and stable” with talk even of Berlin being able to overtake London as the premier location in the future. Even negative news such as the collapse of VC-financed Internet auction platform Auctionata was seen as a sign of the German market reaching maturity. The insolvency was shrugged off as a necessary learning curve.

The private equity market is equally buoyant, even if it is not covering new ground. Complaints about there not being enough suitable assets as acquisition objects have declined compared to last year: cheap credit means that PE houses can pay higher prices once again. But, more importantly, they now seek to add value through more hands-on management and regulatory expertise. This is important, as the number of traditional targets continues to fall. The appetite for large deals has also returned: the public takeover of Stada was the largest PE deal for some years.

New players in a segmented market

The private equity market remains relatively strongly segmented. It is difficult to break into the large-cap market and those firms that have succeeded – such as White & Case – are able to do so because of an integrated international team that can exploit institutional firm relations from the US or London.

Other US firms, such as Kirkland & Ellis, demonstrated just how powerful those institutional relations can be when coupled with leading buyout lawyers. The fact that Kirkland & Ellis snapped up the instruction to advise on the public takeover of Stada speaks volumes. However, the firm also suffered departures: The arrival of US firm Sidley Austin, which has a strong PE practice in its other offices, came by capturing a team around Volker Kullmann from Kirkland & Ellis.

Frequent lateral moves in PE firms

With such large deals in the market it is not surprising that private equity lawyers are much in demand and there has been considerable movement between firms. The almost complete dissolution of King & Wood Mallesons was particularly important because it had a strong PE practice. The move of Dr. Christoph Brenner to Orrick Herrington & Sutcliffe boosted its PE practice, while Dr. Michael Cziesla moved to McDermott Will & Emery.

In the mid-cap market one of the spectacular moves was that of the highly-rated Dr. Michael Bernhardt to Milbank Tweed Hadley & McCloy, who had almost single-handedly built a strong PE practice at Allen & Overy. A similar move was the team from K&L Gates to DLA Piper, reinforcing a team which has been one of the fastest developing in the market.

Moves of senior partners are less common. Thus the move of one of the most experienced PE lawyers in the market, Christopher Kellett, from Clifford Chance to Linklaters surprised many. It is another attempt to exploit the institutional relations Linklaters has in London and to fill a gap in the age structure of the German practice, especially after the firm lost a leading partner to Latham & Watkins last year. The VC market has remained calm by comparison.


Private equity (PE) includes all kinds of activity in the fields of venture capital and risk capital, be it advice to private equity houses or capital holding companies on large transactions (large-cap) or midsized transactions (mid-cap). Firms advise either the private equity house, the target company or its shareholders, and these transactions are similar to M&A deals. Due to the increased market segmentation, there are now separate rankings for mid- and large-cap transactions.

Venture capital (VC) is taken to mean the early investment at the beginning of a company’s development (startup or seed capital). Private equity (PE) refers to larger deals, including those with a large proportion of debt finance (leveraged buyout or LBO).

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