M&A Guru Rodgin Cohen on Sovereign Wealth Funds

In M&A circles, Sullivan & Cromwell’s Rodgin Cohen is hardly a new name. For nearly four decades Cohen, 63, has been a pre-eminent banking lawyer, offering advice on scores of M&A deals and providing counsel on an array of bank regulatory matters. In October 2000, he became S&C’s chairman, juggling firm business with a still-robust banking practice. More recently, Cohen has found himself negotiating a new stream of banking transactions particularly appropriate to an age of capital impairment and global capital flows: sovereign wealth funds. In fact, Cohen has shown up on nearly every SWF investment into a bank that has surfaced since the Abu Dhabi Investment Authority pumped $7.5 billion into Citigroup Inc. on Nov. 26. Cohen represented UBS (in the United States) in early December when Singapore’s Government Investment Corp. invested $11.5 billion; China Investment Corp. in its late December $5 billion stake in Morgan Stanley; Merrill Lynch & Co. in mid-January when it received a $6.6 billion infusion from Singapore’s Temasek Holdings Pte. Ltd. and three other funds; then Citigroup again in its blockbuster $18.4 billion recapitalization by six different investors on Jan. 18.

Cohen is characteristically low-keyed and precise about his role in this stream of deals. He shuns any prescience about the trend — he says he wasn’t involved until Citi approached him and that the banks’ own investment bankers made the contacts. But he does argue that the assignments sprang from work S&C has long done on bank regulation and restructurings. Indeed, the SWF deals, he says, require a dialogue with U.S. regulators — from traditional bank regulators like the Federal Reserve to newly engaged parties like the Committee on Foreign Investment in the United States — eager to privately recapitalize U.S. banks but sensitive to political fears of foreign encroachment. The result: a narrow path that would allow SWFs to take stakes in U.S. banks without any degree of control.