Ask Simpson Thacher Anything (26/27)

[Ediz - Simpson Thacher]

Hi! Thank you all so much for your time! I noticed during my research that Simpson Thacher has worked on some of the biggest funds in terms of value raised. I was wondering if there is something particularly interesting in terms of the role of lawyers in these larger funds compared to, e.g. mid-market funds.

Thank you for the question! From the perspective of fundraising counsel, larger funds / sponsors will tend to have more institutional terms / positions on certain points. The larger funds (e.g., a 500m vs 10bn) fund will also be likely to require greater project management - to name a few examples: the 10bn fund may have multi-currency vehicles in which LPs invest; additional vehicles through which HNW individuals invest; a larger pool of contacts at the sponsor who you need to co-ordinate with. The larger sponsors will also tend to be at the cutting edge of fund mechanics, structures, etc. You should take all of this with a pinch of salt as working on smaller funds will provide its own pros (see Christine's response to an earlier question). Best, Ediz

 

[Ediz - Simpson Thacher]

With private equity sponsors increasingly using continuation funds and other GP-led transactions, how has the work of Simpson Thacher’s Investment Funds team changed?

The team has now grown and includes a dedicated secondaries team that will, by way of example, advise on continuation vehicles. I am a member of the primary fundraising team but there are numerous opportunities to work for both teams (and this is encouraged to give you a broader experience). Best, Ediz

 

[Ediz - Simpson Thacher]

Hi all, thank you all for taking the time to answer our questions. I have two:

@Ediz - Simpson Thacher , I saw that you were seconded to Hellman & Friedman’s legal team while
it was raising major funds. How has seeing the process from the sponsor’s side changed the way you advise funds clients in private practice?

For the wider panel, when do the Investment Funds and Banking & Credit teams work most closely during a sponsor’s investment, and what would a junior associate contribute when both teams are involved?

Thank you!

Thanks for the question! Three points stand out to me: (1) advising the client early on if any gating items to negotiations with investors are anticipated; (2) thinking about how certain terms impact a sponsor's operations (i.e., not just agreeing to terms in a vacuum); and (3) viewing investors as partners (unlike litigation, there is no 'winning' per se). Best, Ediz

 

[Ediz - Simpson Thacher]

Hello! Thank you for your time.
My question is for @Ediz - Simpson Thacher

You have worked within Simpson Thacher’s Funds team and on secondment at Hellman & Friedman. Did seeing the sponsor’s decision-making from inside change the way you approached fund formation work when you returned to private practice? Was there a particular issue you began to view differently after seeing the sponsor’s perspective?

Hello! Please see my response just above. Best, Ediz

 

[174Tess9y3]

Hi @Paul@SimpsonThacher , thank you for taking the time!

During the TCLA zoom you mentioned something about SQE resits but unfortunately my WiFi glitched and I missed the end of your sentence - so sorry if this question is repetitive!

Is it worth applying if I’ve passed the SQE but had to resit one of the FLK’s due to very narrowly missing the pass mark? (But have now passed it all?)

Thanks!

 

[Winifred]

Hi @Winifred

Yes, absolutely. We're interested in understanding the experiences that have helped shape you, so if extracurricular activities from your undergraduate studies or previous legal training are relevant and demonstrate skills, achievements, or interests that are important to your application, you should feel free to include them, even if they took place several years ago.

In terms of how you present them, there's no single right approach. Some candidates choose to focus on a smaller number of experiences and discuss them in greater depth, while others highlight a broader range of activities more concisely. Both approaches can work well.

Ultimately, we're much more interested in the quality of the examples and the reflection behind them than the number of activities listed.

Thanks,

Paul

Thank you, Paul! This is very instructive.

 

[Hugo - Simpson Thacher]

Hi Hugo, thanks for your time! STB talks a lot about being “at the heart of private equity from the beginning”, and I was interested in what that looks like from the fund finance side rather than just the more obvious M&A perspective. In your day-to-day work, how closely does fund finance interact with the wider private equity/private funds practice, and has anything about that relationship surprised you since joining the firm?

Thanks for the question! Fund finance is definitely not a siloed practice. We work very closely with fund counsel particularly during the diligence process (whereby lenders review the fund's constitutional documents to make sure they are compatible with the leverage being contemplated and that security is being put in at the right places). Even after a credit facility is put in place, there will be ongoing obligations on the fund such as telling lenders about new LPs or LP transfers, which often requires us to work closely with fund counsel and administrators of the fund.

As an additional point, given that fund-level borrowing has become widespread and quite standard in the industry, I think it's fair to say that sponsors look for law firms that can advise not only on fundraising and fund formation, but also on bespoke financing needs that arise throughout the life of the fund. I would say having leading practices in both areas is one of our biggest strengths.

 

[Christine - Simpson Thacher & Bartlett]

Good morning Christine,

Thank you for taking the time to speak to us today!

I noticed that Simpson Thacher advises on fundraising for everything from smaller philanthropic funds, such as through the pro bono work with Greater Share, to enormous commercial funds like those held by various Blackstone entities.

From your experience, what actually drives the legal complexity of fundraising: is it primarily the size of the fund, or does it come more from other factors?

What is an example you are proud of in which you contributed to managing these complexities in the fundraising process at STB?

Best wishes,
Rahma

The complexity of a fundraise depends on a lot of factors and how those factors interact with each other. There are more opportunities in a larger fundraise for complexities to arise, both in the structuring stage (e.g., if the fund has a number of vehicles, perhaps in different currencies) and during negotiations (more investors = more chances of a tricky negotiation). However, sponsors of smaller funds can be more creative with how they accommodate investors' requests, which brings its own challenges. I have worked on a few demanding investor negotiations and I would say it's always rewarding to get those investors over the line and closed into the fund.

 

[ni2608]

Thanks for the question! Fund finance is definitely not a siloed practice. We work very closely with fund counsel particularly during the diligence process (whereby lenders review the fund's constitutional documents to make sure they are compatible with the leverage being contemplated and that security is being put in at the right places). Even after a credit facility is put in place, there will be ongoing obligations on the fund such as telling lenders about new LPs or LP transfers, which often requires us to work closely with fund counsel and administrators of the fund.

As an additional point, given that fund-level borrowing has become widespread and quite standard in the industry, I think it's fair to say that sponsors look for law firms that can advise not only on fundraising and fund formation, but also on bespoke financing needs that arise throughout the life of the fund. I would say having leading practices in both areas is one of our biggest strengths.

Dear Hugo.
Thank you so much for your comprehensive answer. This is hugely appreciated!
Kind Regards,
Nikoleta

 

[Paul@SimpsonThacher]

Hi @bristol rovers

Thanks for your questions.

1. No, GCSEs are not part of our entry criteria for the Private Equity Training Contract.

2. A Master's degree is not part of our entry criteria and we do not assign additional weight to applications based solely on having a postgraduate qualification. That said, the knowledge and skills gained through further study can certainly be valuable and may help you demonstrate your interest in and understanding of relevant legal and commercial topics. Ultimately, we assess applications holistically.

I hope that helps!

Paul

 

[Henrik]

@Paul@SimpsonThacher

Since this is Simpson Thacher’s first London trainee intake, you’ve got a fairly unique opportunity to design the programme from scratch rather than inherit decades of convention.

What have you chosen to do differently from trainee programmes you’ve seen elsewhere? And having helped launch the Paul, Weiss training contract, was there anything you learned from that experience that you’ve brought across or chosen to do differently here?

 

[Valentina Chieppa]

@Paul@SimpsonThacher Hi Paul, thank you very much for your time.

My question concerns applicants who completed their studies outside the UK. I completed both my secondary education and undergraduate degree in Italy, and am currently pursuing a Master's in the UK.

As the Italian grading systems differ from those used in the UK - for example, university examinations are marked out of 30 - could you please advise how I should report my results in the application form? Should I enter my original Italian grades and explain the relevant grading scales, or convert them into UK equivalents?

Thank you!

 

[Deman]

@Ediz - Simpson Thacher @Christine - Simpson Thacher & Bartlett
Let’s assume a GP has almost completed raising the target amount for an infrastructure fund. The GP decides to add another region for potential investment, most of the LPs are happy with the proposed change but a small number of LPs cannot approve this change due to their own internal investment policy. What options do fund lawyers (and GPs) have to facilitate the change, if possible?

@Dilraj - Simpson Thacher @Hugo - Simpson Thacher
A buyer acquires a target company through a share sale. The buyer was aware the target company had existing debt. After, the acquisition the buyer and lender agree to renegotiate the existing debt. Why would the lender agree to less favourable terms? Would the buyer have known prior to the acquisition that the lender would agree to renegotiate the existing debt and is it common industry practice to renegotiate debt after an acquisition?

What kind of activities have you all had since you joined Simpson Thacher to get to know the other members of your team and wider firm? Were you given a mentor at the start of your time at the firm and if so, how has this relationship helped you to grow in your role?


Thanks

 

[cutiewiththecontracts]

@Paul@SimpsonThacher Hi Paul, it was good hearing from you at the 5th August event with Jaysen. I've been passionate about PE for a long time and have also gained valuable work experience in the field.

I had a question regarding the right to work sponsorship for the vacation scheme. Would the firm be willing to offer visa sponsorship for successful vacation scheme candidates? I understand while this cannot be an overarching rule, is there room for consideration on a case-to-case basis depending on our performance in the application process?

If we do not have a UK right to work, will our application not be read at all?

Thank you for your time!

 

[Paul@SimpsonThacher]

@Paul@SimpsonThacher Hi Paul, thank you very much for your time.

My question concerns applicants who completed their studies outside the UK. I completed both my secondary education and undergraduate degree in Italy, and am currently pursuing a Master's in the UK.

As the Italian grading systems differ from those used in the UK - for example, university examinations are marked out of 30 - could you please advise how I should report my results in the application form? Should I enter my original Italian grades and explain the relevant grading scales, or convert them into UK equivalents?

Thank you!

Hi @Valentina Chieppa

This is a great question, and we regularly receive applications from candidates who have completed qualifications outside the UK.

My advice would be:

1. Tell us the qualification you completed.
2. Tell us the grading or scoring range used by that institution or education system.
3. Tell us the grade or score you achieved.
4. Where possible, provide the UK equivalent.

We would generally encourage applicants to include their original grades rather than attempting to convert them if they are unsure of the equivalent. If there is a recognised UK equivalency available, it's helpful to include that as additional context.

Most importantly, provide as much information as you can so that we can understand your academic performance within the context of the grading system used by your school or university. Our recruitment team reviews applications from candidates with a wide variety of educational backgrounds and will assess your achievements accordingly.

Thanks,

Paul

 

[Stacy Adei]

Hello @Paul@SimpsonThacher
Thank you much for answering our questions. I am applying for the private equity focused vacation scheme. Please find my questions on the application below.

1. My qualification is not on the UCAS Tariff System, as I’m an international student. Do I leave that question unanswered?

2. For the details of academic awards, prizes or scholarships gained at School, University or Law School, do we include awards given during secondary education?

3. Do internships count as extracurricular activities?

 

[Christine - Simpson Thacher & Bartlett]

Hey Christine! In the Investments Funds Team in the London office, what aspects of advising private equity sponsors have you found most commercially challenging, and how does Simpson Thatcher help develop the judgement needed to navigate this?

Hi Lois! I think it can be challenging to know when to push back on an investor's request or when to try to accommodate it. Different sponsors will have different leverage in their negotiations with investors and may be more/less willing to agree to such requests. An example is bespoke reporting requests - a large fund with hundreds of investors cannot operationally agree to provide bespoke reporting to every investor that requests it, but might be able to accommodate it for strategically important investors, whereas a smaller fund may be happy to provide it to any investor. The judgement on what approach to take comes from experience, both with respect to investor negotiations generally and specific clients (and I am still learning!) - at STB you get lots of opportunity to take on investor negotiations and you are typically staffed across a number of funds to get that breadth of experience.

 

[emaddan]

Hi,

Thank you for taking the time to answer our questions!!

What personal characteristics do you think helps you stand out to the firm?

 

[Christine - Simpson Thacher & Bartlett]

Hi all,

A big thanks to everyone taking the time to answer questions; I have a few to get through so I will be pacing myself!

What can a trainee expect to do at STB? A big part of the TC is early responsibility. Can you give an example of something you were trusted to do earlier than expected and how did you tackle the issue?

Thanks

Jonathan Garson

I expect that the "typical" trainee tasks will look pretty similar to the trainee tasks that you would undertake at other law firms (e.g. assisting with managing process, doing the first cut of certain documents/investor responses, research tasks etc.), and that, as you progress through the training contract and develop more skills, you will have the opportunity to take greater responsibility for tasks. When taking on things that I have not done before or I think are perhaps more complex than I expected to deal with at the level I'm at (e.g. more challenging investor negotiations), I always try to work out what I can first and then ask specific questions on the points I need guidance on.