Editorial: Private Funds in California

01 August 2007

In 1959 Cooley Godward Kronish LLP formed the first institutional venture capital partnership in the United States, Draper Gaither and Anderson, and our research indicates that Cooley Godward remains one of the market leaders in this field today. It is the only firm boasting three nominees on the following pages and was praised as “the leader for venture capital and private equity funds”. The “outstanding” Craig Dauchy heads the firm’s venture capital practice group, an area in which he is said to be “particularly good”. Dauchy has participated in the formation of over 150 private equity and venture capital funds and his transactional practice was brought to our attention as well. John Dado (also in Palo Alto) is similarly well regarded on the transactional side but his primary area of activity remains the formation and operation of private equity and venture capital funds. Daniel Frank completes the trio and is based in the firm’s San Francisco offices. Like his partners he has a strong fund formation practice, but respondents to our survey also noted his tax credentials, particularly when it comes to partnership issues. With three of the practice area’s leading lights it is unsurprising that one source said the firm was “hard to better on venture capital and private equity”. 

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP is another law firm with a leading reputation in this field, and in the figure of founding partner Robert Gunderson it boasts one of the industry’s most experienced practitioners. “A great lawyer”, according to a prominent source, Gunderson’s knowledge of emerging growth companies and venture capital is hard to beat. Fellow founding partner Steven Franklin is another of the industry’s heavy hitters and currently heads the firm’s tax and venture capital and private equity funds groups. A “quite exceptional lawyer”, he has a strong focus on the formation and representation of venture capital and private equity funds on the domestic and international scenes. Wilson Sonsini Goodrich & Rosati also boasts two partners on the following pages – Jonathan Axelrad and John Fore. Axelrad’s is “a name you always hear”, and he is said to have a “great reputation in the VC field”. Representative clients include Clearstone Venture Partners, Sequoia Capital, Trident Capital, and VantagePoint Venture Partners to name but a few. Partner John Fore is also said to be “tremendous on venture funds” and he maintains a well-respected fund formation practice on the private equity side. Fore brings strong industry credentials to the table having served for nearly eight years as general counsel to Bank of America’s worldwide private equity and venture capital businesses, and respondents duly noted his qualities when it comes to representing clients in their investment activities.

Charles Farman heads the corporate and securities group in the Sacramento office of Morrison & Foerster LLP. Sources noted the co-chair of the firm’s private equity fund group is “very well known for private equity”. The firm has been involved in many of the large buyout and venture funds formed in the UK and US by major institutions. Boasting a “good client base" he comes recommended on the fund formation as well as transactional side of the industry. O’Melveny & Myers LLP is internationally renowned for the strength of its fund formation practice and in Kathryn Sanders it has one of California’s most respected practitioners. Praised as “absolutely top quality”, her practice has a large fund formation component. Clients include TCW for whom she has acted as lead counsel on several of its acquisitions. Siobhan McBreen Burke of Paul Hastings Janofsky & Walker LLP was recommended to researchers for her work on behalf of sponsors. Her work for institutional investors such as corporate and government pension plans was also noted. An extremely experienced practitioner, Burke was variously described as “very good and very capable”, “outstanding”, and “unbelievably great”. 

Scott Klein chairs the investment and strategic ventures practice from the Los Angeles office of Latham & Watkins LLP and comes recommended as “an absolute star”. Klein advises investors in negotiations regarding investment funds and comes highly rated for his work on the formation, negotiation and operation of private equity funds. An active corporate practice complements his fund formation credentials. Simpson Thacher & Bartlett LLP’s private funds practice is one of the most respected in the business, both on the formation and transactional sides, and the firm’s standing is highlighted by its receipt of the ‘Who’s Who Legal Private Funds Law Firm of the Year’ award for the past three years. Michael Nooney practises in Palo Alto and focuses on corporate matters as well as the organisation and operation of private equity and hedge funds. Nooney represents sponsors and investors; representative clients include American Industrial Partners, Babcock & Brown, Blum Capital, KKR, Fremont Partners and Pantheon Ventures to name but a few. Sidley Austin LLP appears on the following pages thanks to the high regard in which our sources hold Gary Cohen. Cohen’s investment advisory and private equity practice was admired.

According to our survey, Shartsis Friese LLP boasts the West Coast’s most prominent hedge funds practice. The firm’s prominence can be put down to a number of factors, such as top quality lawyers and a strong local entrepreneurial client base that uses local investment banks, thus creating a market for a firm such as this. John Broadhurst was recommended as “the leading private funds lawyer in the state” and an excellent showing in our research cements this reputation. A “prominent” practitioner, Broadhurst’s practice in the area has grown out of his work in the 1980s helping successful money mangers in the formation of hedge funds. Sources noted the firm’s “enviable client list” and it now has some 500 investment adviser clients.

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