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Interview by Luis Galveias, COO of LPEA as featured in Insight Out Magazine #25
Recently promoted Managing Partner at Clifford Chance, Katia Gauzès, shares the milestones that led to her becoming one of the key persons in the alternative assets industry in Luxembourg.
Congratulations on your promotion! From the early days at the Law University in Lille to becoming a Managing Partner at one of the five ‘magic circle’ law firms, what was your journey like?
Many thanks! It all started in Catalonia, a family place I have been visiting every summer since I was very young. My interest in law probably stems from my godfather, who often worked on legal projects at his law firm in Barcelona and who welcomed me there for my first internship. After high school, I decided to do a bachelor degree at the Faculty of Law in Lille, and then to pursue my studies at Panthéon-Assas University Paris II for two years. At that point, I wondered whether law was my true and only interest and started, in parallel, an MBA at ESSEC. Following my ESSEC years – where I met my husband – I graduated a Master 2 in Law from Assas University and passed the bar exam in Paris. I then started my legal career in Luxembourg at Arendt & Medernach, where I spent 14 years. What attracted me at the time was the opportunity to join a leading domestic law firm in the Luxembourg market. It was interesting to be active in a cornerstone sector of the country. During these 14 years I went from trainee to Junior Associate, Senior Associate and finally Partner.
Following that period, I received a call from Christian Kremer, the Founding, and then Managing Partner of Clifford Chance Luxembourg, who was looking for a Corporate Partner. Joining an international firm, at that point in my career, seemed to be a challenging and interesting step to take. Back then, I would never have imagined that, six years later, I would be replacing him as Managing Partner. I have to say that I am really honoured and also very excited to take on this role. It is quite an important milestone in a lawyer’s career, but in particular for a woman and a person who is not a native of Luxembourg. It also shows that we are working in a truly changing environment which embraces diversity.
Being a woman in the legal and financial world may not always easy, but it is definitely manageable without sacrificing one’s personal life! I realised that having a woman appointed as Managing Partner of a Magic Circle law firm was still exceptional when I received over 2,000 congratulations from people all over the globe telling me that my promotion was a really incredible achievement. That was quite impressive and I am trying to manage expectations and live up to that standard!
You were one of the first lawyers to deal with alternatives funds, which brought you close to the LPEA in its early days, is that right?
I did indeed start in the Private Equity field and was mostly active on the corporate side, so the downstream part of the funds industry. I then worked with corporate partner Guy Harles (a founding partner of Arendt & Medernach), one of the founding members of the LPEA. Back then, I assisted Guy with the association’s Executive Committee and used to call myself the ‘shadow secretary’ – accompanying him and taking notes at every meeting. I have now been part of the industry for the past 20 years and have seen it evolving quite substantially. As for the LPEA, I was very involved in the Legal Technical Committee as from inception and I am very pleased to have been a member of the Board since 2016.
What priorities have you set for yourself and Clifford Chance?
My ambition is the following: grow the clients, nurture the talent. It is very important to combine both.
Our strategy is really to be in constant growth mode and I think there is still potential for the market to evolve in this direction. In a continuously changing environment, increasingly complex advice has to be provided, and our clients are clearly seeking that sophisticated legal advice. We cannot provide this legal assistance if we do not have the right talents within our teams. It takes a lot of effort to attract, train, retain and manage talented people. It is therefore important that our team members have an enjoyable working experience and that we allow them to grow, both professionally and personally. In this way, we can provide the high-quality services our international clients are looking for. We are working on these two key priorities in Luxembourg, in complete alignment with our global growth-oriented strategy regarding financial investors.
We have 31 offices in 21 jurisdictions. Our clients are international and institutional, exploring opportunities on a cross-border basis. Typically, they are looking for teams that can serve them throughout the world, on various competencies. This is where we concentrate our efforts. Financial investors are one of our key strategic focus areas, which is fully aligned with Private Equity. In Luxembourg, cross-border work is part of our DNA and we are involved with a variety of such financial investors clients to a larger extent than any other Clifford Chance office in the world.
Going back to the teams, what can be done to bring foreign talent to Luxembourg?
We put a lot of effort into attracting talents. The HR team is certainly a key driver to reach our recruitment objectives and in combination our Business Development team helps develop our talent-attraction initiatives. Our lawyers also become actively involved with our recruitment initiatives. We believe that the best way to recruit people is to showcase lawyers working within the firm who are both fulfilled and happy to work with us. This represents the main focus of our efforts in Luxembourg, along with the main countries where our lawyers come from, i.e. France, Germany, Belgium and the United Kingdom. We have dedicated initiatives in each of these countries, such as hosting dinners for students in London and Paris during this month of March. We always bring in Associates from our teams that have studied in these cities as they can share their experiences of how their careers have evolved after university.
Both attracting and retaining the right talents requires a lot of commitment. Once new people join our teams, we need to ensure that we provide the right training. Through the Clifford Chance Academy, people can learn either online or via specific training sessions hosted in our offices Amsterdam, Frankfurt, Madrid, Paris and London. This also introduces a networking feeling, which, in our region, we refer to as the “One Europe” mindset. I think this is very important in order to cement the international culture of the firm. In this regard, we have launched last summer a European Secondment Exchange Program for mid-level associates. A member of my corporate team has just started an exchange in Madrid for four months, while our banking team is welcoming an Associate from our Frankfurt office, and we aim to develop such initiatives further. This is also the case with client teams, as we want Associates who are working with specific clients to evolve together regardless of their country of legal practice and cater to the clients’ needs. As we serve both financial investors and Private Equity houses, we seek to provide training using a product-based approach. The funds team will advise clients during the course of the fund formation, the corporate team during the structuring, acquisition or selling of their underlying assets, and the banking team for the fund financing, all of this being done with the support of our tax and litigation colleagues. We are fully equipped to be the one-stop shop for Private Equity clients and to serve them internationally.
The alternative asset industry represents more than a quarter of assets (NAV) in the Luxembourg market. Is this substantial size reflected in Clifford Chance’s activity?
Yes, definitely. It represents even more in terms of percentages for us in Luxembourg. The majority of what we do is around financial investors, which represent approximately two-thirds of our legal work. Luxembourg is a global hub for investment funds. Since most of the major international funds have a presence in Luxembourg, this is the best place to serve them. Within our Clifford Chance global network, financial investors are also one of the three pillars of our firm’s client strategy, next to banks and corporates. Our local strategy perfectly aligns with the global one and, as mentioned above, our teams can accompany financial clients through all stages of their investments.
You have been in the sector for many years. What has particularly impressed you during the “spectacular” growth of Private Equity in Luxembourg in recent years?
When I started working in Luxembourg – about 20 years ago – the funds industry was already vibrant, with UCITS at the forefront. Since then, the alternative sector has grown substantially. In comparison to UCITS, where the assets under management are known, it remains difficult to measure the exact volume of the alternative industry since it is not fully regulated. What strikes me most is how quickly Luxembourg professionalised itself as a country. The LPEA has a similar story: it started as a small association in 2010 and has now grown to include more than 420 members.
Luxembourg has moved over the years from a back-office to a more middle-office centre. I hope that, in the years to come, we will be able to move further along the value chain, i.e. developing relationships with investors, working on our compliance assets, and focusing on the distribution element. There are nevertheless certain constraints, as we are facing more and more regulations. For instance, for ESG, we have started to assimilate the first part of the regulation and our clients had to implement a part of such regulation without having the entire overview of it, since the second level of the regulation was not yet available at inception. This represents a hurdle and also represents a lot of cost in order for our clients to comply with the new regulatory environment.
What are the legal “revolutions” to monitor closely in 2023?
I see three main topics: AIFMD II, ELTIF II and ESG.
For 2023, AIFMD II will definitely be on the funds agenda, but we do not expect a revolution there; rather, continuity.
ELTIF II is also on our radar, in particular since the first ELTIF version was not as successful as the market had anticipated. We are not expecting a drastic change in this space but a strong evolution. We will see if the regulation is able to create a bridge between UCITS and the alternative assets industry via the retailisation trend we are currently witnessing. This trend, which started a few years ago, will potentially be the next important step for the industry. We have worked with major market players, including on the biggest retailisation project to date in Europe, and we witness appetite from other investors that equally want to position themselves in this market. It is a hot topic for the moment, so there are many opportunities to be seized.
Finally, ESG is permeating all sectors. It started with the funds industry and is now entering the banking industry, too. The next step will be the corporate sector with the Women on Boards Directive and The Corporate Sustainability Reporting Directive (CSRD). All those trends have to be taken into serious consideration and will be part of the new due diligence that our clients will have to carry out when targeting new assets.
Luxembourg has also been innovating a lot. We need to keep that on track and constantly come up with ideas to add new features to the famous Luxembourg toolbox. This is crucial to maintain the attraction of Luxembourg for the funds industry. Keeping the status quo is not an option: this would imply regression and a loss of market share. We need to continue to develop ourselves, to think ahead on how to attract new business. And we may all contribute to that, so these are very exciting times!
What is your advice to young legal professionals to move ahead in their career?
It is very important to be curious and dare to be bold. Try to identify your area of interest and the team in which you would best fit and accomplish yourself. In the legal industry, career options are numerous as well as diverse, and you can have several careers in your life. It is a demanding profession that requires working long hours on certain transactions, for instance. Therefore, it is important that you like what you are doing. Try to find an environment where you feel accomplished and have a purpose. This is the reason for which we invite our people – beyond their legal work – to join us on business development and recruitment events or corporate responsibility initiatives. We want to include them in activities that broaden their scope of expertise and experience. There are many opportunities in a law firm; you just have to choose your own path. But do not worry if it is not immediately the right one, as you can always switch fields and departments. Find the right environment, that is very important!
