As well as managing a huge property portfolio, combining the elements that now comprise the business means F&C Reit’s sole lawyer Paul Meads has been a key element in its success.
You know those lawyers who go on secondment to a client and never go back? Paul Meads is one of them.
“I joined Olswang as part of the Kanter Jules deal,” says Meads, referring to the Holborn firm’s takeover of the property boutique in 2006. “I worked with Reit [Asset Management] prior to its merger with F&C in September 2008. Six months after the merger I went there on secondment and never went back.”
F&C Reit is the property business of the F&C group and manages the overwhelming majority of the group’s real estate investment portfolios. Meads, as general counsel, handles all legal and regulatory compliance affairs within F&C Reit. The key elements of that role include advising on major portfolio acquisitions and disposals, acting as a sounding board for the company’s clients on legal and compliance issues and ’translating’ those issues into practical advice for the business.
Meads is also responsible for the management of external lawyers, something he formalised for the first time last year.
“Following the merger of F&C and Reit in 2008 we had a number of firms acting for us, with no structure and no proper dialogue between them,” Meads relates. “The idea of having a panel was to formally identify and recognise our preferred lawyers and to get them working together for the benefit of us and our clients by encouraging them to identify their particular strengths and play to those as best we could.”
These days all asset management matters are outsourced, as is the majority of the company’s work on acquisitions, disposals and financings of portfolios. Employment, IP, tax and litigation are also outsourced, as is the technical regulatory advisory work.
“I handle internally the smaller acquisitions, disposals and funding work, together with commercial contracts, including most of our management agreements, as well as more mundane matters where the cost of outsourcing or the amount of time required to get an external adviser up to speed isn’t worth it,” adds Meads. “It sounds like I do disappointingly little, but the vast majority of my time’s spent as a ’middleman’ or second opinion between some of our external advisers and our staff, trying to make sure that everyone has the information they need to do their jobs.”
The 2008 merger of F&C Asset Management and Reit Asset Management was the last major deal in which Meads took a significant substantive role as opposed to managing teams. The main issue was the complexity of bringing Reit, an international private business, together with an institutional listed public company framework.
“Our [Reit] business was quite fragmented from a legal perspective, so needed a lot of work [involving numerous cross-border issues] to repackage it into a form that would work for all parties,” reveals Meads.
In contrast, Meads turned to his former colleague, partner Simon Kanter, at Olswang for one of the recent big projects that made use of external firms, the acquisition of the Dawnay Day portfolio from the administrators in March 2009.
The deal featured more than 200 properties and almost 1,000 tenants; it was one of the first examples of ’debt-stapling’, in which the buyer takes on the bank debt as well as the portfolio. In this case, Aviva had called in the administrators, making finance available to enable the transaction to proceed.
“The sheer scale of the portfolio made the deal impossible to do in-house; and the Aviva financing, which was only made possible by our longstanding relationship and track record with them, was a mega-deal in itself that was tied to the commercial property deal at a massively detailed level,” explains Meads. “We needed a larger and more specialised legal team than we had here – ie me -to ensure that everything came together properly.”
These days, as part of what Meads calls “a ’proper’ FSA-regulated business”, regulatory compliance is a much bigger part of his life.
“Unfortunately a lot of it’s a rather political, knee-jerk reaction to the banking crisis being pushed by people who have little understanding of the sector they’re trying to regulate, with the result that incoming legislation’s being rushed through without proper thought,” argues Meads. “That said, we embrace more thorough regulation where it increases client confidence, so if it’s managed properly in practice it can work.
“The onus is really on the industry and the FSA – and its successor bodies - to provide greater transparency without strangling the industry in red tape.”
Name: Paul Meads
Position: General counsel and partnership secretary
Reporting to: The board
Employees:Approximately 150 worldwide
Annual legal spend:£3m-£5m
& Spens, Maples Teesdale, Olswang