London firm Howard Kennedy, the only law firm that acts as sponsor to London Stock Exchange listings, last week completed its third sponsorship in ten days.

The firm acted as both sponsor and legal adviser to the listing of venture capital trusts (VCTs) from promoters Shore Capital and Downing Corporate Finance last week. Downing Protected VCT II and III were launched with offers of subscription of up to £40 million, while Shore Capital's Puma VCT and Puma VCT II were offered at up to £32 million.


The week before, it launched Triple Point VCT, aiming to raise £40 million.


Howard Kennedy has now completed 25 sponsorships since it gained sponsor status in 1995, with six in the past five months. Conventional wisdom suggests that law firms acting as sponsor firms could compete with corporate finance clients' own sources of work.


Corporate finance partner Keith Lassman said: 'Other law firms may not have gone down this path because they think they could come into conflict with their client base if they also act as sponsors.


'But acting as a sponsor is reasonably lucrative, and has other benefits. We gain a great insight into the listing rules which, after all, are going to govern all public offers over ¤2.5 million from 1 July this year. We are already familiar with these listing rules because part of the role of the sponsor is to ensure that the documentation is approved by the UK listing authority. We know how it is interpreting the rules.'


He added: 'It also makes the process more efficient for clients in terms of time and money. There is a lot of duplication between what a sponsor and a lawyer does.'


Tim Stocks, corporate partner at City firm Taylor Wessing, which has been on the Stock Exchange panel of sponsors in the past, said: 'We took a decision some time ago not to act as sponsor because the opportunity costs were too great. We have a lot of institutional clients and we would be taking bread off their table.'


The Downing Protected VCTs will invest in companies which own substantial assets offering investors less risk, while the Puma VCTs will target smaller growing companies on the Alternative Investment Market, OFEX or in the unquoted sector.