(February 23) – “The IPO market may have dried up, and with it investment banking work, but don’t count on New Yorkers pulling up stakes and leaving Silicon Valley just yet,” reports Renee Deger onLaw.com, today.

“Several New York satellites are falling back on another longtime East Coast specialty — representing big buyout firms.

“After months of drought, buyout deals are starting to pour in, creating work for the likes of Simpson Thacher & Bartlett and Skadden, Arps, Slate, Meagher & Flom.

“Simpson is even expanding its Palo Alto, Calif., office, partly in response to the recent uptick in deal activity. The firm last week lured Stephen Fackler away from Cooley Godward.

“The former head of Cooley’s benefits and compensation group will pitch on pay-related issues that crop up when buyout funds take over companies. Simpson is also trucking in from other offices two corporate partners along with an intellectual property partner.

“’There’ll be more buyout fund activity, and that means great activity for the firms that specialize in it,’ said Simpson partner Richard Capelouto.

“Like everything else last year, buyout deals fell off. Buyout firms typically purchase companies with equity from funds raised among investors, similar to a venture capitalist. But buyout firms also use debt from banks and the bond market — setting them apart from traditional VCs.

“The capital infusion is used to grow the company while operating revenues pay off debt. Tech companies — particularly still in their initial growth stages — have historically lacked the revenue needed to pay off debt, and that’s kept most buyout funds out of the Silicon Valley deal scene.