Paul Weiss’s raid on Kirkland continues

One thing to start: Wachtell Lipton has fired back at Elon Musk, writing in a California state court filing that the new owner of Twitter, now called X, is required to litigate the law firm’s $90mn fee in a private arbitration hearing rather than the judicial system. The elite firm did tartly note that its work to enforce Musk’s $44bn buyout saved Twitter shareholders more than $20bn, which it described as an “unprecedented result”. Read Wachtell’s filing here.

In today’s newsletter:

• Paul Weiss’s second Kirkland raid

• The scandal gripping Singapore

• Football sponsors under scrutiny

Paul Weiss flexes its muscles in London

In less than a month, US law firm Paul Weiss has gone from a bit-part player on London’s legal scene to a serious force.

Two successive raids on its larger, more profitable rival Kirkland & Ellis have led to Paul Weiss establishing a heavy-hitting team of lawyers capable of advising their private equity clients on deals, debt financings and tax. The final piece of the puzzle is a restructuring and litigation team that can advise buyout firms when deals go wrong.

Led by former Kirkland veteran Neel Sachdev, a well-respected debt finance lawyer, Paul Weiss has moved with lightning speed to grab a deep bench of talent. The new group has strong relationships across top European private equity firms including EQT, BC Partners and TDR Capital.

They include private equity advisers Roger Johnson and Will Aitken-Davies, tax specialists Timothy Lowe and Cian O’Connor and mergers and acquisitions adviser Andreas Philipson, DD’s Will Louch, Arash Massoudi and James Fontanella-Khan have revealed. In total over the past month, Paul Weiss has added 13 new private equity partners with at least 10 coming from Kirkland.

Paul Weiss has also recently brought on Morgan Stanley’s M&A chair Robert Kindler and energy and infrastructure corporate lawyer Ravi Purohit from Latham & Watkins.

More hires are expected in the coming months. What remains to be seen is whether clients follow them too. If they do, this will deal a blow to the Chicago-based Kirkland’s market-leading profit machine, at least in a European market it has had great success in.

The world’s most profitable law firm, where partners earn an industry-leading $7.5mn a year, is used to having the pick of the talent. Now, the predator has turned, to an extent, into prey.

Both Kirkland’s existing team and Paul Weiss’s new hires have been sticking close to their clients in an effort to retain their business, according to people familiar with the matter.

The UK’s so-called magic circle firms will also be watching closely, legal recruiters said, now that another deep-pocketed firm has entered into an already congested market.

What’s certain is that the rapid-fire expansion will shake things up in a market already adjusting to an era of higher interest rates that has slowed dealmaking and fundraising for the private equity firms.

The difficult environment makes it a curious time for Paul Weiss to be betting heavily on the industry, even though it knows it well. The firm has a tight relationship with Apollo Global Management, the private equity giant co-founded by the now-departed Leon Black.

It’s also an expensive play as the new hires won’t come cheap. Lawyers now command salaries more befitting of Premier League superstars rather than your local country solicitor.

Can Singapore remain the ‘Switzerland of the east’?

Gold bars, Bentleys, Hermès handbags, wads of cash, luxury apartments, a daring escape attempt and a police investigation that has captured global attention . . . the S$1.8bn money-laundering case gripping Singapore has all the traits of a seamy Hollywood financial crime drama.

It’s not just the trappings of the raid that occurred in August or the links it has to Chinese money. Nor is it the financial institutions, real estate agents, precious metals traders and even golf clubs now being swept up in the scandal.

It’s the implications it has for Singapore’s ambitions of being the leading financial hub of Asia, the FT’s Mercedes Ruehl explains in this deeply-reported Big Read.

Singapore has for decades prospered in no small measure because of its reputation as the “Switzerland of the east” — a safe and neutral haven for business in an at-times intractable part of the world.

But the money-laundering case has come at a uniquely destabilising time for the city-state. Booming capital inflows — especially from China — are leading to questions over whether an economic model so reliant on foreign capital is benefiting citizens in the way it once did. 

Singapore’s sweet spot between the US and China is also under question as more mainland Chinese cash and influence seeps out of China and into Singapore.

As one expert and former China-focused US official based in the city-state put it: Singapore has “one foot firmly in each canoe, gaining benefits from both [the US and China]. But those canoes are drifting apart, can you really play both sides forever?”

Inside the shadowy world of football sponsors 

UK and European football fans might’ve noticed a new trend on the pitch in recent years: Chinese-language campaigns hawking gambling services on the shirts and pitchside hoardings of their favourite clubs. 

With plenty of Chinese communities across Europe and beyond, there’s no doubt that these betting brands could be targeting customers outside mainland China — where all gambling is illegal except the national lottery and some casinos in select jurisdictions.

But when the FT began looking into these mystery sponsors, some of them raised flags.

At the core, a big question loomed: do Premier League clubs really know whose money flows into their coffers?

The search for an answer sent our colleagues down a rabbit hole of shell companies and “front” organisations, stretching from the Isle of Man to the British Virgin Islands, the Philippines and beyond, which have been used to conceal the true identities of some of football’s most visible sponsors.

Their reporting, chronicled in this FT documentary produced by James Sandy and Taro Yokosawa, sheds light on the due diligence process — or perhaps lack thereof — behind how football clubs vet potential sponsors and whether some of those funds could be coming from illegal enterprises.

“Telling us just the brand is one thing,” the FT’s Cynthia O’Murchu notes in the film. “Unless we really know who are the companies that are providing money, who are behind those companies . . . and where is this money coming from, how do we know for sure that the money is clean?”

Job moves

• Former Bank of Ireland chief executive Francesca McDonagh is leaving her role at Credit Suisse in one of the biggest departures since UBS completed the takeover of its ailing rival in June.

• Boutique investment bank PJT Partners is set to lose key London dealmaker Simon Lyons to Ardea Partners, people familiar with the matter told DD’s Ivan Levingston, where he will take up a senior European leadership role. He has advised on deals including Comcast’s acquisition of Sky, the sale of William Hill to Caesars Entertainment and Cineworld’s restructuring. A representative for PJT and Lyons declined to comment. Representatives for Ardea didn’t respond to requests for comment.

• Goldman Sachs’ chief operating officer of asset and wealth management Laurence Stein retiring at the end of the year. He’ll be succeeded by global markets operating chief Will Bousquette, who will subsequently be replaced by chief administrative officer Erika Leslie.

• Citigroup has promoted Linos Lekkas and Patrick Frowein as co-heads of its banking, capital markets and advisory unit for continental Europe.

• The London Stock Exchange Group has promoted Charlie Walker to deputy chief under Julia Hoggett.

• Former UK national security adviser Stephen Lovegrove has joined Lazard as a senior adviser in London.

• Alibaba’s former chief Daniel Zhang has unexpectedly stepped down as head of its cloud computing division ahead of the group’s six-way split.

• The Restaurant Group chair Ken Hanna has said he will step down for personal reasons following a growing chorus of calls from investors for him to go. 

• Moelis has named Arash Nazhad as a managing director and co-head of its clean technology group, based in Houston. He joins from Citigroup.

Smart reads

No-BS banking With clients from Martha Stewart to Carl Icahn, banker-to-the-stars Jane Heller has ultra-wealthy clients lining up for her no-nonsense approach, The Wall Street Journal writes.

Still in the game When Lina Khan’s Federal Trade Commission settled over Amgen’s $28bn acquisition of Horizon Therapeutics, dealmakers rejoiced. But the US antitrust chief chalked up smaller wins in the process, DD’s James Fontanella-Khan writes.

Shooting for the moon An FT exploration of the events leading up to the crash of the Hakuto-R lander by Japanese start-up ispace in April has uncovered a corporate culture described by some as “toxic”.

News round-up

Strong demand pushes Arm to close IPO order book early (FT)

Australian pension fund buys into European data centres to tap AI boom (FT)

Walt Disney and Charter settle dispute that blacked out TV programming (FT)

TRG in ‘advanced’ talks about Frankie & Benny’s sale (FT)

Société Générale teams up with Brookfield in private credit push (FT)

Finance hits back against US regulator’s rulemaking spree (FT)

Mizuho seeks to break curse over foreign forays on Wall Street (FT)

Instacart’s cut-price IPO to test Wall Street appetite for new tech listings (FT)

JM Smucker: Hostess not the mostest despite Twinkies brand nostalgia (Lex)

Lawyers have lost power if Schillings is going into PR (FT Opinion)