Oliver Cary, Ashurst

Ashurst associate Oliver Cary was grateful to see the completion of the Vestas European Strategic Allocation Logistics Fund (VELSAF I) in November 2020, as the fact that the UK had just gone into another lockdown meant there was nothing else to focus his attention on.

The timing was “a happy accident” he says, as it “meant that some long hours didn’t impact any social or family engagements – given none were permitted at the time!”

Cary joined Ashurst in September 2016 as a trainee and qualified at the firm in September 2018. He advises on large and medium sized fundraisings, typically ranging between €300m and €4bn, co-investments and joint venture arrangements and sponsor executive carried interest and co-investment arrangements for well-known sponsors, for example, ICG, Foresight, Vestas, Altor, CapMan, Sprints, Equitix, Agilitas and Ninety One.

“I enjoy all aspects of being a funds lawyer. I enjoy the wide variety of work that our team does for our clients and, as an associate in our team who works on all aspects of these transactions from start to finish, I enjoy the variety that brings on a daily basis, from structuring a project and drafting the legal documentation to negotiating those documents and closing the transaction,” he says.

“I’m inspired by having a role in delivering innovative structuring and contractual solutions to support the growth of our clients’ businesses. We work at the heart of our clients’ businesses and often the transactions that I am involved, like VESALF I, are transformative for them. An awareness of the positive impact that our work has for our clients, as well as having a real and genuine sense of being at the cutting edge of the market, driving forward market practice, is what most inspires me the most. I also really enjoy forming long-term and enduring relationships with our clients, as we work collaboratively to achieve objectives together over the long-term. This long-term approach suits me as a person and is another hugely enjoyable aspect of my work.”

Ashurst advised on all aspects of the establishment of the Vestas European Strategic Allocation Logistics Fund (VELSAF I) launched by Vestas Investment Management (Vestas) in partnership with Savills Investment Management (Savills IM).

VESALF I is among the first ever ‘blind’ pool fund arrangements that have been raised solely from Korean institutional investors to invest in European real estate. It will target core/core-plus logistics assets of between €40 and €140m across all key European markets.

Savills IM will be the European investment adviser and asset manager, in partnership with Vestas, who has raised the capital for VESALF I from Korean institutional investors. Vestas raised €200m which, combined with its and Savills IM’s co-investment and up to 60 per cent of leverage, will give VESALF I a target gross asset value of between €450 and 500m.

VESALF I was seeded with its first asset in November 2020, being the acquisition of a new logistics unit (115,000 sq m) in Tholen, the Netherlands, which has been leased to DSV. A further acquisition in Poland followed in February 2021 and a UK asset will be acquired in Q3 2021 and is already under exchange. Ashurst also advised on each of these acquisitions from a funds, tax and real estate perspective.

The structuring and drafting of the arrangements and related documentation were subject to a tight timetable and real-time pressure because of the scheduled completion date of the first acquisition in the Netherlands. That, coupled with working with clients in the UK and Korea and local counsel in the Netherlands, meant first-class project and time management was essential to completing the deal on time.

The seamless service provided to the clients on this transaction by Ashurst’s funds practice, in collaboration with the firm’s taxation, regulatory and real estate experts and under tight time pressure reveals the multidisciplinary nature of the team.

“I learnt a considerable amount from the process. Ashurst’s funds group works across all asset classes and I was able to learn more about logistics real estate assets on this deal, whilst at the same time drawing on my knowledge of other asset classes where useful for this deal. I learnt about particular Korean tax and regulatory considerations, which had an impact on the deal structuring and documentation, and found that interesting. The international nature of transactions, including building cross-border client relationships, is one of the key motivations for becoming a City lawyer and this deal had that in spades,” Cary says.

“I also learnt a lot about drafting fund documents from a clean slate. Often, as juniors, we start with a developed precedent and build it out from there to fit the transaction. The real test here was preparing a document from scratch, by building out the terms from different and diverse sources, but in the most part from our experience and own analysis and thought processes – this was (and felt) like real innovation. In addition, the process taught me about the interrelationship of terms, and I hugely enjoyed collaborating with Nick to get this right. The fact that it was done in spite of the challenges of lockdown made it all the more satisfying.”

One key outcome of devising the structure for and implementing the VELSAF I fund arrangements was that Ashurst’s real estate practice were instructed on two further acquisitions made by VELSAF I in 2021, including the legal due diligence related to these acquisitions. These were significant pieces of work and necessitated input from the funds practice in relation to the framework agreement because, like for the first acquisition in Tholen in November 2020, the real estate and funds practices had to work together to ensure the governing documents for the fund investment vehicles interplayed correctly and were consistent with the framework agreement arrangements.

Advice from the Ashurst tax practice was also required in relation to the structuring of the fund investment vehicles for these acquisitions and Ashurst’s real estate finance team were also instructed to act for these vehicles in relation to the leverage arrangements for these acquisitions.

VELSAF I will make further investments during its two-year investment period and Ashurst very much hopes to continue to advise on these from a funds, real estate, tax and real estate finance perspective.

Savills IM has been a longstanding client of Ashurst and Ashurst’s funds team recently advised them in relation to their Asia Pacific Income and Growth Fund. The work on that fund and VELSAF I further affirmed the team’s relationship with Savills IM and has resulted in continuing instruction from Savills IM on similar fundraising transactions.

The innovative nature of the transaction and the technical knowhow of the Ashurst funds, real estate, regulatory and tax practices has led to multiple conversations with other clients of the firm, including other large and longstanding real estate clients who are looking for innovative and fund orientated solutions for investing in real estate assets and/or restructuring their existing real estate asset portfolios.

Nick Goddard, a partner in Ashurst’s funds team, has been a key player in those discussions and is looking to build upon the success of the VELSAF I transaction in the market alongside other key partners, such as David Jones (real estate), Simon Swann (tax), Tim Gummer (tax) and Bradley Rice (regulatory).

Another positive outcome of the transaction was the deepening of internal relationships between Ashurst’s practices. The funds team regularly works with tax and regulatory experts on numerous fundraisings and transactions and is now collaborating and communicating with personnel in the real estate and real estate finance practices more because of the VELSAF I transaction and the opportunity to build upon it in the market. The transaction also allowed junior members of each relevant practice to work closely together and build important relationships for the future.

“This was a landmark transaction and what really stands out is the collaborative approach taken by all of the stakeholders to deliver an innovative solution for our clients. Ashurst was central to the innovative structuring for VESALF I, which was driven by legal, regulatory and tax issues for Savills IM, Vestas and the investors (including as a result of their jurisdiction), and I found my role in this very rewarding. The process of delivering the new structure and the watershed moment when the deal came together to complete, all supported by our incredible and very collaborative multi-disciplinary team, was immensely satisfying – this stands out the most to me,” Cary explains.

“The key technical sticking point was how VESALF I was going to be structured given the competing requirements from the investors (driven in no small part by the jurisdiction from which they were investing), Savills IM, Vestas and the jurisdictions in which the logistics assets were to be located (for example throughout Europe). There was no one fund vehicle which could achieve an appropriate balance of all of these requirements and so, unusually, we proceeded without one and created an intricate contractual matrix which aimed to create individual structures for each asset but with an overarching framework of commercial terms which applied to VESALF I as a whole. This was complex and involved us all understanding the commercial, legal, tax and regulatory drivers from the top to the bottom of the structure, in order to correctly reflect how this should work. It took time, patience, immense collaboration and a serious amount of determination.”

Cary has continued working for Savills IM and Vestas on the investments that VESALF I made, primarily from a funds perspective but also reviewing the underlying investment documents and providing guidance on the agreed framework commercial terms to other Ashurst teams working on them. Elsewhere, he’s been busy working on fundraisings and internal arrangements for ICG, Foresight (in relation to arrangements for their €851m Foresight Energy Infrastructure Fund) and CapMan (on their €565m CapMan Nordic Real Estate III Fund) and with a number of other clients on confidential matters.

“The deal has a very high profile at Ashurst and has supported me in building my profile and network internally. I’m hoping this will support my progression in the years to come. As mentioned above, this deal has a high profile externally as there are many clients who are now looking to use Ashurst’s expertise and, along with Nick and David Jones, I aim to be at the forefront of those discussions. This will help me develop a specialist element to my practice, alongside my other broad experience and my more conventional fundraising work,” he adds.