Summary List Placement
Companies in the energy sector are moving full steam ahead on big projects in 2021 driven by demand for renewable solutions— and elite law firms are gearing up to fight for work with hires in debt and finance groups.
Firms like Kirkland & Ellis and Allen & Overy have all recently hired energy pros to bulk up their debt and project finance teams, which help clients navigate the cost and execution of large-scale energy and infrastructure projects, such as toll roads, airports and power plants.
That scouring for talent comes as the energy sector shifts gears to green and renewable energy projects, in addition to traditional infrastructure opportunities like roads and ports.
Part of the demand is being driven by a booming appetite to invest in sustainable investments as more investors look to use their money to influence issues like climate change, racial justice, and corporate governance. In 2020, exchange-traded funds and mutual funds with an environmental, social, and governance (ESG) focus attracted a record $51.1 billion from investors, more than doubling inflows from a year prior, according to a January report from research firm Morningstar.
“Infrastructure is the big explosion right now. It’s one of those critical industries and the definition of infrastructure has expanded,” said one managing director at an investment bank that spoke on the condition of anonymity. “There is also a huge discussion on ESG opportunities and how [bankers and lawyers] can be involved in this.”
Procuring debt for an infrastructure project is tricky too, and such a nuance requires particular expertise. Unlike a corporate bond, which typically involves a borrower, its bank, and a law firm, project finance can often involve multiple parties from a sponsor backing the project to an offtaker that traditionally purchases the product being produced at the infrastructure facility.
And in a new green era for infrastructure, firms will chase the top talent needed not just to win mandates, but maintain that momentum into the future and obtain the repeat business that banks and law firms crave while obtaining that stamp of approval from an increasingly conscious corporate citizen.
“Everything with a green flavor is being worked on and you need the manpower to do this. We are living and breathing it and this type of financing is exploding,” the banker said.
Law firms are getting in on the action
Big Law firms that are already known as leaders of project finance work and the energy sector are solidifying their dominance with a spate of new hires.
Allen & Overy this month poached a large group of lawyers from Akin Gump Strauss Hauer & Feld’s project finance and renewables practice. The new team, which includes six partners and a group of associates, will be based in Los Angeles, opening the firm’s first office on the West Coast, and they will bring their expertise — which includes financing the world’s largest solar PV plant in Abu Dhabi and the first solar plus storage peaker plant in the world in Hawaii — to the firm.
Kent Rowey, a partner in Allen & Overy’s projects, energy, natural resources, and infrastructure (PENRI) practice, told Insider that the hires from Akin Gump rounds out his group as a “full service, go-to-market, holistic team.”
“Candidly, we didn’t really have a leading practice in that area, and one of our main strategic objectives this year was to recruit a team that covers renewable energy,” he said, adding that the appetite for renewable-focused is becoming a greater share of the work his team now takes on.
“We’ve reached an inflection point in how to fix climate change, and we think the policies around renewable energy will be more accommodating. Clients are recognizing that and are developing investment strategies in renewables,” he said.
In the last few weeks, Kirkland has also hired two energy-focused attorneys —Rachael Lichman and Tatiana Monastyrskaya —in Houston and New York, respectively, to its debt-finance practice, which serves private-equity clients in various industries in their financing transactions.
Monastyrskaya, who focuses on project financing in the infrastructure and renewables space, told Insider that it’s an “exciting time” to focus on infrastructure because her clients have an increased interest in energy efficiency technologies such as hydrogen, white hydrogen, and some battery storage.
She expects “a lot of potential growth and creative financial solutions” because there are new infrastructure funds regularly coming into play while established funds continue to deploy capital in a low-yield environment, she said.
Lawyers and asset managers also have their eyes on the new administration’s ESG push and how President Biden will work with the Department of Labor and Securities and Exchange Commission to prioritize, treat, and define them.
And while it hasn’t made any hires yet, the law firm Winston & Strawn last month launched an energy and infrastructure group to focus on electric power, infrastructure, and the oil and gas sector, the firm said in a press release. The group will be led by the firm’s existing project finance practice group and energy regulatory practice group heads.