Innovation has become something of a dirty word in 2008. Much of the financial trickery used by banks and their lawyers to construct capital markets offerings has been blamed for the world's economic woes. But the real blame lies with the way those deals were sold, explained and rated. There's nothing wrong with complication per se.

At IFLR we are proud to celebrate innovation. It is not necessarily good, and some products may mask risk with overcomplicated layers of packaged securities or derivatives. But it is not necessarily bad either, and the lawyers that worked on those deals deserve recognition for their hard work and, most of all, their ingenuity.

At IFLR we are also rather proud of our awards. As the only legal award that is transparent and specific with its criteria, the owner of an IFLR trophy can feel he has been rewarded for work well done and objectively judged. Not for some opaque combination of importance, size or simply "having a great year".

Throughout the 11 years they have been running, IFLR has strived to reward genuine legal innovation in European finance. That, and nothing else. We analyse legal innovation, and nothing else.

Every year one or two firms don't read our criteria correctly, and send us reams of information about how many lawyers they have hired. Some tell us they worked on all of the top five deals last year. One or two protest that their deal had a lot of media coverage. We don't care. IFLR only rewards legal innovation, and to an extent the market impact of that innovation.

This has created consistency. It means that the awards are transparent. The most innovative deals win, and the firms that worked on those innovative deals win. Many awards ceremonies fall short of this transparency. No one really knows why firms win awards. Clients vote for their favourite firms, using whatever criteria they prefer.

Here, we are proud of the analysis our journalists put in every year. People trust our awards, just like they trust our magazine. The research process itself began in November and lasted right up until a few weeks ago. Thank you very much to all those who took the time to help, through providing information and taking calls from our various journalists.

I wish you all continued success in 2008.

Simon Crompton, IFLR editor

Asia private equity team of the year

Jeanette Chan and Jack Lange from Paul Weiss Rifkind Wharton & Garrison

Paul Weiss Rifkind Wharton & Garrison

Other nominated firms:
Clifford Chance
Freshfields Bruckhaus Deringer
Shearman & Sterling

Paul Weiss Rifkind Wharton & Garrison rode the wave of Asia's private equity success story in 2007.

The firm's highlight was arguably its role in Oaktree Capital's $1 billion buyout of Fu Sheng in Taiwan. This was the first private equity buyout of a listed company in Taiwan, and acted as a benchmark for other private equity hopefuls. The main obstacles came from the regulators. With Taiwan's Stock Exchange ailing, the FSC worried about private equity investors buying majority stakes and de-listing companies

Paul Weiss also acted as international counsel for KKR's investment in Tianrui Cement in China. This was a prime example of the recent move to onshore structures in China.

Europe private equity team of the year

Nick Shrimpton (centre) presents the award to Ludwig Leyendecker and Oliver von Rosenberg from Freshfields (left and right, respectively)

Freshfields Bruckhaus Deringer

Other nominated firms:
Allen & Overy
Clifford Chance
Lovells

Freshfields had a major role in two of the IFLR short-listed private equity deals. It advised CVC Capital partners on the sale of its stake in ista International for $3.2 billion. The Freshfields private equity team also represented Permira in its acquisition of Valentino Fashion and its subsidiary Hugo Boss.This deal effectively created two public-to-private transactions in two jurisdictions (Italy and Germany) under the same deal umbrella

Elsewhere the firm advised Centaurus and Paulsson as major shareholders of Stork in relation to Candover's bid, Cinven on the disposal of Klöckner Pentaplast to an affiliate of The Blackstone Group for €1.3 billion and Investor AB and Morgan Stanley Principal Investments on their €2.85 billion acquisition of Mölnlycke Health Care Group from Apax.

Americas private equity team of the year

Adele Bonnie of Simpson Thacher receives her award from Simon Crompton

Simpson Thacher & Bartlett

Simpson Thacher & Bartlett won roles on half of the deals shortlisted this year. The practice excelled in its representation of private equity firms in some of the most significant transactions of the year. It acted for KKR in the First Data and TXU acquisitions. It also advised Blackstone in its acquisition of Hilton.

Other nominated firms:

Blakes Cassels & Graydon

In its representation of Hilton Hotels when Blackstone acquired the company, the firm took part in a trend of private equity behaving like strategic investors.

Davis Polk & Wardwell

The firm's role representing the target in the Citadel cash investment in E*Trade Financial places the firm under consideration for team of the year.

Osler Hoskin & Harcourt

The firm's role for KKR in its $29 billion acquisition of First Data helped to reopen a sluggish market.

Schulte Roth & Zabel

It represented Cerberus in the highly talked about acquisition of Chrysler, making one of America's icons the product of a private equity buyout.

Sullivan & Cromwell

Represented the targets on Hilton Hotels and TXU - at $45 billion, the largest ever US leveraged buyout.

Asia private equity deal of the year

Left to right: Jin Tao from Jun He, Victor Chang of LCS & Partners, Simon Crompton of IFLR, Jack Lange from Paul Weiss Rifkind Wharton & Garrison and Wen-Hsuan Lin of Lee & Li

Oaktree - Fu Sheng

Following Carlyle's high-profile failed bid for Advanced Semiconductor Engineering, private equity buyouts in Taiwan seemed doomed. The Financial Services Commission (FSC), the country's regulator, was conjuring up new conditions for bids and investors were getting cold feet. But Oaktree's majority buyout of Fu Sheng a golf club manufacturer was a blessing for the sector.

The main obstacles to the deal came from the regulators. The FSC was dealing with a potentially volatile buyout. With Taiwan's Stock Exchange ailing, the regulator worried about private equity investors buying majority stakes and de-listing companies, with the risk of them not re-listing.

As such, the successful buyout represents a milestone in Taiwan. All approvals were firsts and the deal proved that private equity buyouts are possible in Taiwan.

Paul Weiss, arguably lead counsel, was in constant dialogue with the FSC. Jun He Law Offices and Lee & Li acted for Oaktree while Baker & McKenzie advised the shelling shareholders of Fu Sheng. LCS & Partners was sole counsel to Fu Sheng.

Runners-up

CVC – Zhuhai Zhongfu

This deal marks the largest private equity investment to date in tradeable A-shares of a China-listed company. It is also the first control-oriented Pipe (private investment in public equity) deal in China involving a direct investment in tradeable A-shares.

Clifford Chance advised CVC Asia Pacific on its acquisition of a 29% interest in tradeable A-shares in Zhuhai Zhongfu Enterprise. Jun He also advised CVC along with Maples & Calder.

The deal took advantage of laws passed in 2006 that encouraged investors in the A-share market. But these laws were drafted to appeal to trade buyers not private equity investors, with the necessity of a $500 million net capitalisation in order to qualify – understandably difficult for a company with no draw down.

Central Ministry of Commerce approval was needed and despite being notoriously difficult to achieve, was gained within six months. CVC and Clifford Chance structured the entire deal before approaching the Ministry. Alpha Law Firm represented Zhuhai Zhongfu.

Longreach – EnTie

This deal was the first majority buyout in the rapidly consolidating Taiwanese banking industry. The existing consumer credit problems in the sector, which were compounded by the sub-prime fallout and resulting credit crisis, were overcome.

The transaction was effected through a unique and complex structure that involved the issue of common shares and newly-issued Series 1 Convertible Perpetual Preferred Shares, which are convertible into common shares at a one-to-one ratio. It is also still rare for a (primarily) Japanese fund to pursue a foreign business. It inspired copycat deals, with other Japanese funds showing signs of emulating Longreach's outward-looking business model.

Shearman & Sterling acted as international counsel for Longreach while Debevoise & Plimpton represented Orix, the co-investor. Houthoff Buruma also represented Longreach alongside Tsar & Tsai Law Firm and Maples & Calder. Lexcel Law Offices also advised Orix.

Project Capricorn

This was a $135 million structured equity-linked private financing for an Indonesian coal mine owned by PT Ilthabi Bara Utama (IBU).

The equity units entitle the holders to part of a royalty stream that will be paid out of IBU's Ebitda and can be exchanged for equity in the unlisted company once the notes expire or automatically converted in the event of an initial public offering.

The deal is tightly structured and investors have been granted full senior secured priority. In addition, IBU can only draw down the funds on a staggered basis, with each drawdown subject to completion of pre-determined milestones.

Milbank represented PT Ilthabi Bara Utama. Latham & Watkins acted for the placement agent.

Warburg Pincus – Titan

This was a dual-layer deal. Warburg Pincus subscribed for three different types of securities in Titan Petrochemicals Group Limited and for two in Titan's subsidiary, Titan Group Investment.

The entire transaction had to be structured around the terms of high-yield notes issued by Titan in 2005 and a complex pre-closing reorganisation had to take place to ensure compliance with the terms of the notes. The transaction also had to be carefully structured around the connected person regime in the Hong Kong Listing Rules and the mandatory offer regime under the Hong Kong Takeovers Code.

Freshfields and Davis Polk & Wardwell advised Warburg Pincus, and played a pivotal role in the structuring the dual-layer deal. Skadden Arps advised Titan Petrochemicals alongside Conyers Dill & Pearman.

Europe private equity deal of the year

Simon Crompton of IFLR with (L-R) Ian Frost of Freshfields, Martin Geiger of Hengeler Mueller, Andrea De Tomas of Bonelli Erede Papallardo, Christian Cascante of Gleiss Lutz and Peter Goes from Linklaters

Permira / Valentino

Permira's $1.064 billion acquisition of a controlling stake in Valentino Fashion Group was quickly followed by $2.919 billion and $2.212 billion takeover offers for the outstanding shares in Valentino and Hugo Boss (of which Valentino had a controlling stake). This effectively created two public-to-private transactions in two jurisdictions (Italy and Germany) under the same deal umbrella.

This transaction had been praised for its logistical innovation in meeting unique regulatory and timetable requirements and also for the successful negotiations with shareholder families.

Freshfields Bruckhaus Deringer acted as international counsel and Bonelli Erede Pappalardo acted as Italian counsel to Permira. Carey Olsen provided assistance in the Channel Islands. Gleiss Lutz and D'Urso Munari Gatti worked out of Munich and Milan respectively for Valentino, while Studio Legale Gambino advised International Capital Growth on the sale of the original controlling stake. Hengeler Mueller represented Hugo Boss in Frankfurt and Düsseldorf and Linklaters advised the banks.

The runners-up

Apollo / Countrywide

The circumstances surrounding the £1 billion ($1.99 billion) Apollo acquisition (via incorporated company Castle Bidco) are what make this transaction unique. Only a week before Apollo's recommended scheme of arrangement, 3i had another recommended scheme of arrangement voted down. 3i had just put out a no-increase statement which locked its bid unless another bid came in. Apollo's entrance created a semi-competitive situation.

Apollo's successful bid was also interesting because of the structure of its offer. Countrywide was a public limited company that owned another public limited company (Rightmove – a property website) which is unusual. Apollo had no interest in Rightmove, so it offered cash and shares in the website to persuade Countrywide shareholders to sell. This created many novel drafting solutions.

Ashurst worked for the sellers and Slaughter and May for the purchasers.

Charterhouse / CVC stake in ista

Charterhouse's $3.2 billion acquisition of CVC Capital Partners' stake in metering business ista International was Germany's largest secondary buyout in 2007. The transaction was structured as a dual-track procedure and the final decision for a share sale was taken very late. It also marked a change in tack for Charterhouse that has focused on UK domestic deals in recent years. Finally, ista has over 40 subsidiaries around the world, but principally in France, Denmark, Spain, the Netherlands and the United States.

Allen & Overy provided advice to Charterhouse, while Freshfields Bruckhaus Deringer represented CVC Capital Partners. P+P Pöllath + Partners advised the ista management and Shearman & Sterling represented the banks.

KKR / Alliance Boots

This £11.1 billion ($22.04 billion) deal was important in a number of ways. KKR and Stefano Pessina used AB Acquisitions as a bid vehicle on the recommended takeover of Alliance Boots in the largest leveraged buy-out in Europe . The transaction marked the first private equity takeover of a FTSE100 company. It was also the first large, completed public takeover in Europe to involve the underwriting of equity by financing banks.

KKR turned to a combination of Clifford Chance and Simpson Thacher & Bartlett for representation. MacFarlanes was hired by Stefano Pessina and Alliance Boots sought advice from Slaughter and May.

Americas private equity deal of the year

(L-R): Krystle Fonyonga of IFLR, Sidley Austin, Wilson Neely of Simpson Thacher, Daniel Serota of Sullivan & Cromwell and Donald Mosher of Schulte Roth & Zabel

KKR/First Data

Kohlberg Kravis Roberts (KKR)'s $29 billion acquisition of First Data last September was known to revive a stagnated market, and became the template for underwriters that wanted to reconcile their jumbo loan commitments with disappointing market realities. It also helped reopen the market.

First Data was represented by Baker & McKenzie, Schulte Roth & Zabel, Gibson Dunn & Crutcher, Sidley Austin and Blakes Cassels & Graydon. Sullivan & Cromwell also represented the strategic review committee and independent directors of First Data. KKR was represented by Simpson Thacher & Bartlett and Osler Hoskin & Harcourt. Davis Polk & Wardwell acted for the banks as providers of bridge equity commitments to KKR.

The runners-up

Blackstone/Hilton Hotels

Blackstone's $26 billion purchase of Hilton Hotels last October marked a new trend in private equity: some private equity companies are now behaving more like strategic investors than calculated short-term buyers.

At the time of acquisition, Blackstone was in the hotel Reit (Real Estate Investment Trust) business with properties such as LaQuinta.

Sullivan & Cromwell, Blakes Cassels & Graydon and Blake Dawson represented Hilton Hotels. Simpson Thacher & Bartlett, Osler Hoskin & Harcourt, Mallesons Stephen Jaques and Herbert Smith Gleiss Lutz Stibbe acted for Blackstone.

Cerberus/Chrysler

The August closing of the $7.4 billion Chrysler sale to Cerberus was the first time an iconic American automaker had been put up for sale to private equity. It was also the last significant private equity transaction to close before the credit crunch at the end of the summer.

Schulte Roth & Zabel represented Cerberus, with Freshfields Bruckhaus Deringer acting as German counsel. Skadden Arps Slate Meagher & Flom and Shearman & Sterling were co-M&A counsel to Daimler. Fasken Martineau DuMoulin was Canadian counsel to Daimler. Hogan & Hartson acted as FCC counsel to Daimler. Creel y García-Cuéllar y Müggenberg represented Cerberus. Milbank Tweed Hadley & McCloy acted as structured finance counsel to Cerberus. Jauregui Navarrete y Nader represented DaimlerChrysler Financial Services Mexico.

Citadel/E*Trade Financial

Citadel Investment Group's $2.5 billion cash investment in E*Trade Financial's asset-backed securities and common stock last November was one of the first to set market value for a portfolio of mortgage-backed securities in the midst of the sub-prime financial crisis.

Lawyers had to adjust to changing markets. The deal had to be consistent with E*Trade's prior debt covenants and accommodate the need for various regulatory approvals relating to control of E*Trade, while avoiding holding company status for Citadel.

Fried Frank Harris Shriver & Jacobson represented the buyer. Davis Polk & Wardwell acted for the target.

Harbinger Capital Partners/ Calpine Power Income Fund

In February 2007, Harbinger Capital Partners completed its $766 million acquisition of Calpine Power Income Fund. The hostile takeover bid came in the middle of a complex corporate multi-billion dollar restructuring.

Goodmans represented Calpine Canada Power, and McCarthy Tétrault represented the company in Calgary. Stikeman Elliott acted for Harbinger Capital Partners with Milbank Tweed Hadley & McCloy acting as US counsel. Fasken Martineau DuMoulin represented Credit Suisse, and Davis Polk & Wardwell was US counsel. Blakes Cassels & Graydon acted for the fund.

KKR/TXU

KKR completed its $45 billion acquisition of Texas Pacific Group (TXU) last October, marking the largest US leveraged buyout. Not only was it large, but the deal recognised environmental concerns and cut residential electricity prices. When TXU's stock dropped due to concerns about the risk and vast expenditure of the company's 11 planned coal plants, the private equity firm saw the opportunity to take the undervalued company and change its business strategy.

Sullivan & Cromwell and Cravath Swaine & Moore represented TXU. Simpson Thacher & Bartlett, Hunton & Williams, Vinson & Elkins, Strook & Strook & Lavan, Covington & Burling, Davis Polk & Wardwell, Cleary Gottlieb Steen & Hamilton, McDermott Will & Emery and Dechert advised the consortium. Fried Frank Harris Shriver & Jacobson represented Goldman Sachs.