Kramer Levin has lured a corporate partner from competitor Arnold & Porter to its office in New York. David Berg, a lawyer specializing in M&A, joint ventures, financings, venture capital, and funds transactions, comes to Kramer Levin as a partner. Berg’s clients include purchasers and sellers, many of them active in the biotech, media, telecom, aviation, and manufacturing sectors.
In an exclusive interview with IFLR1000, Berg described a growing focus, on the part of clients, on financial services, especially in the consumer finance and specialty finance realms. That has formed the bulk of Berg’s practice over the last couple of years, and it is an area he and his colleagues expect will continue to be active, Berg said.
At this juncture, much activity in the market is driven by banks’ efforts to figure out how much exposure they want consumers, Berg observed. He noted that alternative investment managers are looking to fill some of the gap with respect to providing dollars in the consumer finance space and in the area of small to mid-sized business lending.
“With some distance from the financial crisis, we’re seeing more confidence in the consumer finance market, even as the regulatory landscape has uncertainty. Deal activity in this space as well as across the board in the middle market is helped by the favorable financing environment, driven by continued low interest rates. The availability of credit continues to be important,” Berg commented.
Howard Spilko, co-chair of the firm’s corporate department, described increased interest from strategic investors as another driver of deal activity. As strategics strive to boost revenues and EBITDA in order to meet investors’ expectations, acquisitions present the clearest path to this growth. Hence Spilko and his colleagues are seeing a great deal of interest in picking up well-established companies.
“There are opportunities for companies from outside the U.S. looking to the U.S. market for growth, and doing inbound investment. We’re also seeing a lot of outbound investment. In Europe, we’ve been working with our colleagues in our Paris office on a joint venture with one of our private equity clients based principally in the U.S. which is teaming up with a company in the U.K. to provide financial products to consumers. It’s an example of how clients which had previously tended to be more domestic in terms of their investment focus are looking internationally for opportunities,” said Spilko.
Another trend identified by Spilko has to do with representation and warranties insurance, both dometically, and in international deals in particular.
“Sellers outside the U.S. are used to limited on-going indemnity obligations, while U.S. buyers often have an expectation of greater coverage, and parties are looking more and more to bridge that gap through representations,” Spilko added.
Berg holds a J.D. from New York University School of Law and a bachelor’s degree from Brown University.