Xiaoyang "XY" Li, a private equity and mergers and acquisitions attorney, will join the firm as a partner in December. He joins from Chinese M&A boutique Jun He Law Offices in Beijing, where he was a senior partner. Before that, he was on the management committee of King and Wood, China's largest law firm.
Kirkland and Ellis is also transferring Justin Dolling from London and Albert Cho from New York. Both start in Hong Kong in January next year. Dolling advises private equity fund managers on the structuring and establishment of private equity investment funds, while Cho focuses on the formation of private investment funds for purposes such as domestic and offshore private equity buyouts.
Kirkland remains confident that there will be plenty of business setting up private equity funds in Asia. ôWhile all asset classes are in a deflationary state at the moment, alternative investments û although riskier û do seem to be outperforming other kinds of investments, at least in certain parts of the world. And the result is that blue-chip sponsors are still raising money for private equity,ö says David Patrick Eich, a senior partner at the firm's Hong Kong office.
ôThere's huge lead time in fund formation so once sponsors generate momentum for a fund raising process, even tumultuous global events don't necessarily change 10- or 15-year investment ambitions,ö he adds.
Looking to the future, Eich sees private equity in Asia becoming more sophisticated. This is evident by, among other things, the advent of secondary funds, which buy the interests in limited partnerships from other investors. ôThis is a sign of a market that has achieved a certain level of depth, because these funds can only survive where there are lots of limited partnership interests that can change hands. There's a certain level of maturity in a market that supports these funds.ö
Kirkland's global private equity group has more than 400 attorneys û 150 of whom focus on private funds formation û across nine offices. It has been involved in the setting up of around 400 private equity funds for over 200 sponsors since 1995, raising approximately $300 billion. The firm opened its Hong Kong office in 2006 and since then it has represented more than 20 private equity funds on leveraged buyouts, growth equity investments, fund formations, and other complex equity deals in Asia.
Kirkland is strengthening its regional capabilities at a challenging time for private equity investors, also known as financial sponsors. As lending has dried up, private equity investors are finding it difficult to raise even relatively modest levels of leverage for their deals. And without leverage, it is difficult for private equity firms to achieve their target returns. But experts are still optimistic that the situation for private equity firms in Asia will improve sooner than it will elsewhere. And Kirkland is building its capabilities in anticipation of that time.
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