The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Nisha Kanchanapoomi is a corporate partner in the Los Angeles office of Kirkland & Ellis. Nisha’s practice focuses on debt finance transactions with an emphasis on representing private equity sponsors, public and private companies, hedge funds, asset managers, and alternative capital sources in complex financing transactions, including leveraged buyouts, recapitalizations, liability management transactions, restructurings, and other special situation transactions. Nisha received her B.A. in English from the University of California, Berkeley, and her J.D. from the University of Southern California.
Osaro Aifuwa is a debt finance associate in the Houston office of Kirkland & Ellis. His experience includes financings of energy and infrastructure projects in the oil and gas and power sectors, including bank and bond financings, structured equity financings, margin loan facilities, and leveraged financings. Osaro graduated from the University of Virginia Law School in 2017. The IFLR1000 named him a Rising Star in Project Finance, and The Legal 500 U.S. honored him in the category of Energy: Renewable/Alternative Power.
Describe your practice area and what it entails.
Nisha: Debt finance is an exciting and diverse practice area that involves the representation of borrowers or creditors in connection with all matters debt related. Our practice is comprised of the largest dedicated group of debt finance practitioners in the marketplace, and we provide creative and thoughtful counsel on a wide variety of transactions. My practice specifically involves representing sponsors, borrowers, and, at times, creditors.
Osaro: I am a debt finance associate, representing private equity investment funds in primarily energy and infrastructure financing transactions.
What types of clients do you represent?
Nisha: We serve a client base that is wide and varied, ranging from leading global private equity firms to Fortune 500 corporations, hedge funds, asset managers, and alternative capital sources. Some of my clients include private equity firms, such as Altamont Capital, Ares Management Company, Brentwood Associates, Coral Tree Partners, Gryphon Investors, Hg Capital, and Industrial Growth Partners. Additionally, I represent hedge funds and asset managers such as Fortress Credit Advisors and Oaktree Capital Management, and companies like Bed Bath & Beyond, Neiman Marcus, Express, Forever 21, and rue21.
Osaro: I represent the top private equity sponsors in the landscape including KKR, Clearlake Capital Group, Carlyle Group, Blackstone, Centerbridge Partners, I Squared Capital, and Ridgewood, among others.
What types of deals do you work on?
Nisha: We represent private equity funds on debt financing transactions, whether it is related to leveraged buyouts, refinancing, recapitalizations, liability management transactions, restructurings, or workouts. We also have a growing liability management and credit opportunities practice where we have advised on some of the most complex and high-profile liability management and opportunistic credit transactions in recent years. My practice encompasses both of these practices. Some examples of my past deals include Neiman Marcus’ $4.5 billion out-of-court recapitalization, which was the largest out-of-court transaction at the time, and Fortress’ financing of the take-private transaction for Perry Ellis, which involved an innovative intellectual property holding company financing structure.
Osaro: I work on sponsor-backed financing in connection with leveraged buyouts and minority investments. These deals typically involve a private equity sponsor either buying an entire business segment using equity and debt financing or a sponsor structuring an investment in a joint venture, also using equity and debt financing.
How did you choose this practice area?
Nisha: I chose debt finance because I enjoy the practical aspects of the practice. This includes not only being a trusted advisor to my clients and understanding their business needs, but also analyzing, drafting, and digging into debt arrangements. In recent years, I’ve had the chance to see the intersection of debt finance and restructuring. On restructuring matters, I enjoy helping companies work through a difficult period that will hopefully allow them to reorganize as a financially healthier company and save jobs.
Osaro: My favorite class in law school was Secured Transactions because of its logic-based construct of the relationship between borrowers and lenders as it relates to lender protection for providing collateral, so it was a match made in heaven when I discovered that there was an area of transactional law founded upon that class. I’ve also found the style of debt finance conducive to my personality and how I think. In the end, it was a no-brainer.
What is a typical day like and/or what are some common tasks you perform?
Nisha: A typical day for me can include team and client calls on various matters, drafting and negotiating deal documents, analyzing existing debt documents of companies, strategizing with the team on structuring capital solutions, and mentoring and advising younger attorneys on deals or practice-group matters.
Osaro: My typical day involves drafting and negotiating the main financing documents based on commercial terms agreed to between our sponsor client and their lenders. In addition, I also spend significant time putting together ancillary documentation that is required in connection with closing on the financing. And finally, as expected, I coordinate and manage the process of closing on a financing, which involves collaboration from everyone on the team.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Nisha: In law school, I would recommend taking basic contract law and business organizations/corporations classes, along with any corporate-specific classes such as M&A, secured transactions, securities laws, negotiations, etc. If you have the chance to work at a business clinic or to intern with a corporate practice, that hands-on experience may be helpful for giving you a sense of what it’s like to work directly with clients on real-world matters. Also, honing your written and verbal communication skills will be invaluable—we are often tasked with breaking down complex matters into simple layman’s terms so that our business counterparts understand the key issues without too much legalese.
Osaro: I would recommend taking business or corporate-related courses, especially those that offer business transactions through a legal lens. I would also recommend taking Secured Transactions (or something similar) in law school to see if debt finance could be something that fits your vision for transactional law practice.
What misconceptions exist about your practice area?
Nisha: When people hear the word “debt,” they will often pigeon-hole it into a practice that is narrow and limiting. Quite the contrary; it’s one of the most engaging practices because at some point, most companies will encounter debt and even rely on that debt to grow the business. In good times, companies look to debt financing to fuel the buyout of businesses or to return capital to investors, and in bad times, those same parties need to understand how their debt works to manage liabilities and potentially create a structure around upcoming maturities and operational restrictions while continuing to run the business.
Osaro: Many people assume that one must have some sort of finance or other corporate background to thrive in a debt finance practice. My background is in marriage and family therapy, which bears little-to-no connection to debt finance, and yet I have found this practice invigorating, exciting, and very learnable.
What is unique about your practice area at your firm?
Nisha: Given how large and diverse our practice is, there is something for everyone in the field of debt finance. In addition to the more traditional aspects, we have expanded into the liability management and credit opportunities space, as well as fund finance and project finance. We are also uniquely leveraged because Kirkland has one of the strongest private equity platforms in the market and one of the deepest debtor-side restructuring practices in the world, so we work in tandem with both our M&A/private equity and restructuring colleagues.
Osaro: The wide variety of products and industries that I’ve had the privilege of working on highlight some of the strengths of Kirkland’s debt finance practice. From project-style financing to top-tier, sponsor-backed leveraged buyouts to asset-based lending transactions and reserve-based lending transactions, I enjoy the opportunity to test these products in the energy, packaging, and technology sectors.
What kinds of experience can summer associates gain at this practice area at your firm?
Nisha: Our summer associates can expect to get hands-on experience from day one. They will have the opportunity to participate on calls with clients and negotiations with opposing counsel, draft deal documents, and potentially assist with signings or closings of transactions. We don’t shy away from staffing them on real deals, and we want to give them as much real-world experience as possible so that they hit the ground running as associates.
Osaro: Summer associates at Kirkland get the opportunity to interact with some of the main documentation in debt financing and, with support and guidance from senior associates and partners, can also get fully integrated in the deal teams, which would include drafting opportunities and direct client communication.
What are some typical career paths for lawyers in this practice area?
Nisha: Career paths for debt finance attorneys can vary. Some of our former colleagues have become in-house counsel at large asset managers and private credit funds, while others have shifted to the business side and joined the capital markets function at private equity firms. Others have taken on hybrid roles at hedge funds where they help with analyzing and understanding debt arrangements of target companies and assess risk with respect to making investments in such businesses. The career paths for debt finance attorneys can be really interesting and diverse, so long as they keep an open mind on how they can leverage their debt finance skills.
Osaro: Associates at Kirkland may have the opportunity to be promoted to non-share partners after their sixth year as an associate, which opens doors both within and outside of Kirkland. And since Kirkland has extremely strong relationship with top-tier private equity shops, many associates here have opportunities to transition to prestigious in-house roles if that is where they wish to take their career.