Overview
The financial crisis damaged the Russian economy and set back what had previously been a booming market for bank lending. Predictably, 2009 saw many restructurings in the market. While the traditional syndication markets have remained subdued, 2010 saw an increase in financings backed by export credit agencies and new money financings.
The Russian stock market saw steady growth in late 2010, driven by the upturn in oil prices and a weakening US dollar. Due to the accumulation of liquidity in the market and increased investor interest, there were a smattering of successful IPOs of Russian companies but, by and large, the IPO markets remained unstable throughout 2010, with a number of deals being pulled or postponed until the year end.
During 2009, the Russian M&A market continued to see sluggish activity levels. Most corporate restructurings were drawn-out, painful affairs and for the most part debt restructuring was more easily achieved than M&A as sellers sought to hold onto their assets rather than sell out at what they saw as distressed valuations. State-owned entities continued to play an important role in the market, although even they found it hard to bring transactions to closing and it was the smaller and medium-sized deals which tended to get done. 2010 had a good start, and the prognosis for 2011 is optimistic. The recent upsurge in potential IPO, the easing of financing conditions, and the relative economic recovery has restored confidence in the market. Banking, real estate, TMT and other industry-driven sectors are showing increased levels of activity.
The Russian legal market is volatile, and lateral hires of both individuals and, in some cases, teams are part of the legal landscape. This year international firms such as Clifford Chance, Freshfields Bruckhaus Deringer, Gide Loyrette Nouel, White & Case LLC and Linklaters CIS were all subject to key partner moves. One firm’s loss is another’s gain, and, despite the difficult economic climate, many law firms, including those mentioned above are investing in growth. Akin Gump Strauss Hauer & Feld LLP has for example welcomed the tax team from what was once Hogan & Hartson LLP. Of the Russian firms, Vegas Lex suffered a blow when a number of its partners left to form Korelskiy Ischuk Astafiev and Partners, Attorneys at Law.