James P. Patti
In late February, Turkey’s prime minister unveiled plans to build a three-tier tunnel underneath the Bosphorus Strait, linking by car and rail the city’s European and Asian parts.
The ambitious, $3.5-billion project that Turkish press reports call the “Grand Istanbul Tunnel” is expected to put 2,000 people to work.
One of them will be Mayer, Brown LLP partner James P. Patti.
Out of an office in the Hyatt Center on South Wacker Drive, Patti is one of the most active lawyers in Turkish finance. In February, he made his 40th trip to the country — 11 hours each way — since 1998, when he handled his first financing transaction there.
Since then, he has logged more than 430,000 air miles — enough to circle the globe 17 times or Jupiter nearly twice — and closed 130 deals that help local banks turn short-term consumer deposits into long-term loans for infrastructure projects such as the tunnel.
While the eight banks he works with can use the funds raised in those deals for general corporate purposes, much of the money is intended to fund their lending to long-term local infrastructure projects such as the Grand Istanbul Tunnel.
“Over the past 10 to 15 years, there have been a couple of huge bridges built over the Bosphorus,” Patti said, adding that airports and tunnels have been built, too. “And money from these types of deals and others helps to finance that.”
Patti’s practice is devoted to financing transactions in emerging markets. The majority of his work — about two-thirds of his practice — is done in Turkey. He has also worked in Kazakhstan, Nigeria, Peru, Brazil, Russia (less frequently at the moment) and elsewhere. He has traveled, he said, to roughly 35 countries during his 21 years practicing at the firm.
His Turkey practice is unique, but it is also indicative of the effect globalization has had on Mayer, Brown and other Big Law firms since the turn of the century.
Of Mayer, Brown’s 1,500 lawyers, 46 percent now reside outside the U.S. And even lawyers in Chicago work on deals from halfway around the globe.
“Jim’s practice is really a good example of that,” said Douglas A. Doetsch, co-head of the firm’s global banking and finance practice.
“It’s a very broad-based, internationally active firm at this point, which was really not the case when I joined 26 years ago.”
Patti’s practice is an outgrowth of Mayer, Brown’s early involvement in Latin America.
Patti studied abroad in Mexico as a high schooler and as a college student at Georgetown University. After graduating in 1994 from the University of Chicago Law School, he eyed Mayer, Brown because it was making inroads south of the border.
Shortly after joining the firm, he helped Douglas A. Doetsch represent one of the U.S.’s, and the world’s, largest banks in a financing transaction with a local Mexican bank. That deal was designed to help the local bank make loans based on the huge in-flows of money sent home by immigrants working in the U.S.
Known as “remittances,” this pool of funds was huge. Around $10 billion was shipped to Mexico from the U.S. in 2000, according to the Pew Research Center. But because that money is often quickly withdrawn, banks cannot easily use it to make long-term loans.
That is, until Doetsch and Patti’s client crafted a financing deal that uses those flows of money as collateral for longer-term commercial loans. The large, international bank underwrites the deal that provides long-term funding for local banks in Mexico.
After working with Patti and Doetsch in Mexico, a banker from the large national bank (Mayer, Brown declined to name the client) moved to Turkey. He called Patti to see if a similar deal could be worked out in Istanbul.
The profile of deposits at Turkish banks is slightly different than in Mexico, but they share a crucial, common element: They are short-term. The “DPR” transaction Patti helped devise allows them to provide long-term loans — a process known as “fund-matching.”
“If I am a bank and I know I’m going to have $100 million for five years, I can then lend it to a local Turkish company who is building a bridge for $100 million for five years. That’s what these deals do,” Patti said.
“When I have a deposit that’s going to be gone tomorrow, it’s a little more difficult for me to make a loan for five years when I only have Turkish lira and it could be gone tomorrow.”
Patti has brought this same type of financing to Brazil and Peru. And he is currently consulting the Philippines-based Asian Development Bank on remittance financing. Doetsch said Patti’s practice is an example of how the firm has followed its largest clients as they have grown overseas.
“The first Turkish transaction we did was for one of the largest banks in the United States,” Doetsch said.
“It was a client then. It’s still a client. And it found itself interested in helping clients in Turkey and not just in Peoria.”
Patti now helps eight banks in Turkey close such transactions. He visits Istanbul two to three times a year — sometimes to close deals in person, others simply to network and meet with clients. He hasn’t gone a year since 1998 without visiting the country.
Yet, in a sign of lawyers’ grueling work schedules, he has never left Istanbul to see the rest of the country.
“Usually it’s just hotel, office and back,” he said. “And there is so much more to see in the country. It’s a fascinating country. The traditions are just amazing. And I long to be able to do that, someday.”
If he waits a projected five years, he may also be able to take a 14-minute trip through the Grand Istanbul Tunnel.