OFFSHORE FIRM OF THE YEAR: HARNEYS
Harneys wins its first Offshore Firm of the Year title in 2016 for consistent and impressive growth around the world while retaining a significant presence in its headquarters in the British Virgin Islands (BVI). Judges praised the way Harneys “stays hungry” for growth.
In the past two years Harneys has launched three offices, in Bermuda, Shanghai and Tokyo. The former was through a merger with local firm Hurrion & Associates, announced in September last year, while its Asian launches gave the firm representative bases in two jurisdictions in which many of its rivals are absent.
In Shanghai Harneys picked up Ogier’s Shanghai managing director Kristy Calvert to lead its new operation.
Managing partner Peter Tarn says the three launches were different in nature and in terms of the strategic reasoning.
“Tokyo is really about building on a strong Japanese-Cayman-focused team in Asia and we have great strength in Hong Kong in terms of our Japanese staffing and product,” Tarn says. “Tokyo’s about building on that, having people on the ground and increasing leverage. It’s a really niche market in which we’re operating there, but it’s growing fast and has been incredibly successful.”
Tarn says Shanghai has been a slower starter. Harneys has applied for a licence to practise law there but is still waiting for approval, meaning at present Shanghai is a representative office.
“Shanghai is all about the potential we see in the PRC which builds on strength in Hong Kong and the rest of Asia,” he adds. “We’re in it for the long haul.”
He says Bermuda was the hardest launch, as it was through a merger.
“It’s easy to open an office and provide the services you already provide, but this is different in terms of providing advice in a new jurisdiction,” Tarn explains. However, he adds that several firms were open to the merger and Harneys has plans to expand the office further.
The firm has been one of the biggest hirers in the offshore market for the past few years and 2015 was no exception. Recruitment included a funds team led by Appleby’s former global funds head Ian Gobin in the Cayman Islands.
While expanding rapidly Harneys has managed to maintain high double-digit turnover growth. It says its Hong Kong revenue had nearly doubled and Cayman and London litigation revenues have more than doubled in the past two years.
Unlike several competitors, Harneys has also retained its fiduciary arm and it says turnover from the business grew by 11 per cent last year.
Client relationships and key deals
Key mandates in 2015 included advising Nasdaq-listed supply chain services and solutions provider UTi Worldwide on its $1.35bn (£1bn) acquisition by DSV for a cash consideration by way of statutory merger pursuant to the BVI’s merger code. Harneys partners Simon Hudd and Greg Boyd, assisted by associate George Weston, worked alongside Cravath Swaine & Moore on the transaction, which is one of the largest takeovers of a publicly listed BVI company.
In Cayman Harneys represented Chinese web services giant Baidu on the $2.5bn sale of its controlling stake in Qunar Cayman Islands to Ctrip.com International. The all share-swap deal represented an alliance between the two biggest players in China’s online travel agency market and took the combined market valuation of the two online travel companies to $15.6bn. Harneys partner Matt Roberts led the transaction with partner Ian Mann, counsel Raymond Ng and senior associate Jayesh Chatlani assisting.
The firm is also well-known for its litigation capabilities and is acting on the long-running Saad litigation for the joint official liquidators of SIFCO5. The case concerns allegations of fraud and unauthorised borrowing exceeding $9.2bn from over 100 banks globally, and is one of the highest profile and longest running disputes ever to be litigated before the Cayman Court.
Harneys partner Marc Kish, senior associate William Peake and associate Silvana Nastasi and are involved in the case.
Tokyo is really about building on a strong Japanese-Cayman-focused team in Asia
Tarn says Harneys’ deals are notable for their variety and innovation.
“It doesn’t matter how many zeros you’ve got on the end of things, it doesn’t matter who’s involved when it comes to the hard fact – have you added value?” he argues. “Our geographical spread gives us a fair chance at picking up some interesting transactions. A solid institutional client base also increases the chance of getting these interesting deals.”
Judges’ comments and reaction
“Another year of strong performance,” commented one judge, while another said the firm was “dominant in its markets, innovative, stays hungry and continues to see profitability growth”.
Tarn says the reaction to Harneys’ win across the firm was excitement, with many lawyers and staff finding out even before he had left the ceremony at the Intercontinental O2 hotel.
“This is an award from our peers, from people who matter to us,” Tarn says. “The Lawyer Awards matter. It gives us instant recognition with clients that maybe they’re not the only people who have seen the firm as somebody they want to partner with.”
RUNNERS-UP (IN ALPHABETICAL ORDER)
Bermuda-headquartered Appleby focused its submission on its work for reinsurance company PartnerRe in what was only the second contested M&A deal in the jurisdiction.
The firm was selected as PartnerRe’s adviser when the company entered into an all-share agreement and merger plan with insurance company Axis. The proposed deal was valued at $11bn. Appleby corporate head Tim Faries and partner Allan Bossin were instructed alongside US firm Davis Polk & Wardwell, with Conyers Dill & Pearman and Sullivan & Cromwell on board for Axis.
Under the terms of the agreement holders of PartnerRe common shares and holders of Axis common shares were each to receive common shares in the amalgamated company. The proposed transaction was considered to be a ‘merger of equals’.
The Lawyer Awards judges praised Appleby’s ‘clear sectoral understanding’
Appleby’s advice included ensuring that the terms allowed PartnerRe and Axis to terminate their agreement in the event of a ‘superior proposal’ coming on to the table.
A body of PartnerRe’s shareholders were vocally opposed to the deal, so Appleby was also heavily involved with advising the board on evaluating the best course of action to take, taking into account the obligations imposed under Bermuda law.
However, before the deal could complete Italian investment company Exor appeared on the scene and made a fresh bid for PartnerRe. The reinsurer retained Appleby as its lead offshore counsel as the board considered which offer was the superior proposal.
Ultimately, PartnerRe chose to combine with Exor, bringing a new name into the Bermuda insurance market.
The PartnerRe-Exor merger was not Appleby’s only big insurance mandate of the year. Other M&A deals included the sale of Montpelier Re Holdings to the Endurance Speciality Group for $1.83bn.
The firm’s team also advised on the incorporation and registration of African Risk Capacity Insurance Company (ARC) in Bermuda.
ARC is Africa’s first specialist catastrophe insurance pool, designed to reduce the cost of emergency contingency funds and accelerate the availability of those funds to participating African governments.
The Lawyer Awards judges praised Appleby’s “clear sectoral understanding” as well as its impressive client list.
Working alongside UK counsel Allen & Overy (A&O), a cross-practice team from Carey Olsen helped steer through last year’s acquisition of Friends Life Group by Aviva for £5.6bn. The deal impressed judges and led to Carey Olsen taking third place in this category.
Friends Life was a Guernsey company and its acquisition involved the highest value scheme of arrangement ever to go before the Royal Court of Guernsey. Carey Olsen’s involvement in a series of major schemes of arrangement since the tool was introduced into Guernsey law in 2008 meant it was able to leverage that expertise to steer the Friends Life acquisition through the courts.
Partner Tom Carey and senior associates Adrian Sarchet, James Stockwell and David Allen led Carey Olsen’s work over six months. The transaction involved corporate, competition and insurance aspects under both Guernsey and Jersey law, working with the financial services commissions in both islands and obtaining the sanction of the court.
In particular, the team added technical expertise in areas such as defining the ‘scheme shares’ to which the scheme would apply; and handling fractional shareholdings.
It is expected that the Aviva scheme of arrangement judgment will become the leading authority on the conduct of schemes of arrangement in Guernsey.
The deal helped Carey Olsen to achieve another strong year featuring double-digit income growth, and came as part of a busy year strategically for the firm. Judges noted the firm’s “real breadth and ‘vision’ of its place in the markets”.
Having opened in the BVI in 2013, last year saw it establish a BVI litigation team with the hire of Ben Mays from Maples and Calder. Mays is supported from Jersey by BVI-qualified partners Andreas Kistler and Marcus Pallot and of counsel Jeremy Garrood.
The firm also opened in Singapore last year. The city-state is Carey Olsen’s first Asian office and continues its strategy of expansion outside the Channel Islands. Singapore is headed up by former A&O partner Linda Lee, supported by senior associates Elizabeth Killeen and Alan Hughes.
Organic growth remains very much part of the firm’s strategy and Carey Olsen made up five partners internally last year.
Collas Crill was created in 2011 when Channel Islands firms Collas Day and Crill Canavan merged. Last year saw further expansion, with the merger between Collas Crill and Cayman firm Charles Adams Ritchie & Duckworth (CARD), with judges saying it was a “firm that is travelling”.
Clients had been asking for a dedicated Cayman offering and the merger means Collas Crill now has a presence in Singapore, London, the Channel Islands and the Caribbean. The addition of CARD led to a big pick-up in work in Singapore and the firm recently acted as Cayman counsel on the formation of an Asia-focused funds of funds structure involving Cayman exempted limited partnerships and exempted companies.
In other strategic developments, the firm engaged research provider Acritas to conduct a client survey to improve service and delivery, drive consistency across the firm, ensure brand messages and values resonate with clients and contacts, and provide actionable feedback to build into the firm’s strategy.
The firm says it had a strong 2015, with growth continuing into the first months of 2016.
As well as the CARD merger Collas Crill also made a series of hires in 2015, including bringing on board Harneys private equity partner Joss Morris and Kobre & Kim litigation partner Stephen Leontsinis in Cayman. Other hires included a string of senior associates and consultants in the Channel Islands.
Key deals in 2015 included advising payments service provider SafeCharge International Group in its successful migration from the BVI to Guernsey. The company floated in April 2014 on AIM, raising $125m and is now capitalised at around £400 million.
SafeCharge’s decision to move to Guernsey was motivated by several factors, one being Guernsey’s reputation as a base for a number of funds and companies that are listed on the London Stock Exchange, the thinking being that the jurisdiction’s positioning could help the company move to the main market in the future.
Collas Crill’s team was led by partner Sean Cheong, supported by senior associate Gareth Morgan and associate Simon Heggs.
Conyers Dill & Pearman
For Caribbean firm Conyers Dill & Pearman the year’s highlight was its advice on the largest take-private deal for a US-listed Chinese company – a $9.3bn transaction for Qihoo 360 Technology Co.
A series of Chinese companies announced they were undergoing take-private transactions last year, delisting from US exchanges to pursue IPOs in China. Qihoo announced it was to take itself private in June and by December had entered into a definitive agreement.
The transaction followed the structure established in a series of recent US take-private deals, which have used the merger structure rather than a traditional scheme of arrangement or voluntary general offer.
Qihoo is now likely to list on the Hong Kong stock exchange or a Chinese exchange, and will seek to benefit from the Chinese government’s drive to promote the growth of home-grown technology companies.
Conyers’ 2015 highlight was its advice on the largest take-private deal for a US-listed Chinese company – a $9.3bn transaction
Conyers co-chair David Lamb provided Cayman advice to Qihoo chairman and CEO Hongyi Zhou as well as consortium members China Renaissance Holdings, CITIC Securities Co, Golden Brick Capital Private Equity Fund and Sequoia Capital China. The consortium acquired the shares it did not already own.
Conyers worked alongside Kirkland & Ellis and Skadden Arps Slate Meagher & Flom on the transaction.
The deal helped propel Conyers to high rankings on a variety of global M&A and capital markets deal tables.
Conyers boasts a growing client base, expanding it by 12 per cent annually. In particular, it is expanding its Asian client base and other Chinese transactions last year included New WuXi Life Science’s $3.3bn buyout, Youku Tudou’s $3.5bn go-private merger and Excelsior Union Ltd’s $3.3bn buyout.
The awards judges commented that Conyers was a “consistent performer” that “continues to reinvent itself to reflect its market”.
Maples and Calder
Maples and Calder’s standout deal of 2015 was its advice to Ireland-headquartered global aircraft leasing firm Avolon in its $7.6bn sale to Bohai Leasing Co, a subsidiary of the HNA Group.
The firm has advised Avolon on several milestone transactions since its formation in 2010, beginning with an initial capital raise of $1.4bn. In 2013 Maples’ Cayman and Irish offices advised Avolon on a $636m asset-backed securitisation issued by Emerald Aviation Finance Limited – a significant achievement for Avolon, as at the time it had been a number of years since a rated public aircraft securitisation successfully went to market.
In 2014 the firm advised on Avolon’s IPO, which was the largest ever IPO by an Irish-founded company on the New York Stock Exchange. The listing valued Avolon at $1.6bn and put an enterprise value on the business of $6bn when its $4.3bn debt is taken into account.
Maples has hung on to its fiduciary business and is growing faster than the market average
The 2015 transaction had a complex, multi-jurisdictional structure. It was structured as a merger using provisions of the Cayman Islands Companies Law.
The Maples team included Cayman partners Alasdair Robertson and Jonathon Meloy and counsel Nicola Bashforth in the Cayman office, Cayman-qualified London partner Nick Evans, and Dublin partners Ed Miller, Will Fogarty and associate Mark Roberts.
The deal underlines Maples’ strength in the aviation finance space. The firm acts for the six largest export credit agencies and export-import lending banks in the world, 35 per cent of airlines and 45 per cent of lessors.
The Avolon transaction was one notable feature in a solid year for Maples. Unlike some of its competitors the firm has hung on to its fiduciary business and is growing faster than the market average with a headcount hike of 13 per cent last year.
A previous category winner, Mourant Ozannes continues to flourish, now six years on since the cross-Channel Islands merger that was the catalyst for its growth since. It has opened in a number of jurisdictions, most recently Hong Kong which has tripled headcount and doubled revenue in its first three years.
Last year Mourant Ozannes said firmwide revenue grew by 20 per cent while profit was up by 41 per cent.
Its geographical profile helped it pick up work such as its standout deal last year, CVC Capital Partners’ sale of Asia Education Investment Ltd’s shareholding in Education International Cooperation Group to Guangdong Qixing Education Investment Co.
The deal was the most notable in a portfolio of work undertaken for CVC in Asia in 2015. The firm has expanded its relationship with CVC in Asia since the launch in Hong Kong, with previous work including advising on the Jersey-related aspects of CVC’s fourth Asia private equity fund in 2014. In the Channel Islands Mourant Ozannes has acted for CVC since 1992 and globally worked on 50 instructions from the client last year – as one judge noted, this “shows the benefit of developing a long-term relationship with a key client”.
CVC in Asia has also engaged the firm’s ‘ancillary’ business Mourant Ozannes Corporate Services (MOCS). MOCS was established in 2013 to enable Mourant Ozannes to provide a more seamless service – its establishment following on from the sale of legacy Mourant du Feu & Jeune’s larger fiduciary business before the merger.
In the past year Mourant Ozannes has developed a bespoke MOCS client portal enabling clients to access online all necessary data relating to their administered entities at any time and from anywhere.
The firm is also in the process of realigning teams by sector in order to be more product- and market-focused, as well as jurisdiction/practice area-focused.
A focus on Islamic finance handed Ogier second place, a year after it scooped Offshore Firm of the Year.
The firm highlighted its work as Cayman counsel to Garuda Indonesia on its $500m sukuk, an offering done without any government or financial institution guarantee, making it the first Asia-Pacific national flag carrier to successfully issue a USD benchmark bond on a standalone basis since Qantas Airways’ USD bond offering in April 2006.
The work was led out of the firm’s Hong Kong office. The Garuda offering was structured as a Wakala Sukuk based on Rights to Travel using an orphan-based Cayman SPV. This is the first non-sovereign USD sukuk out of Indonesia, paving the way for other Indonesian SOE state-owned enterprises and corporates to tap this market.
Ogier was required to show a strong understanding of the Wakala Sukuk structure. It established a Cayman SPV and charitable trust in accordance with shariah principles and provided the 15 joint lead and co-managers with the legal opinions. The deal is an example of substantial growth in Ogier’s Islamic practice, as well as across the finance practice.
The Garuda offering is an example of substantial growth in Ogier’s Islamic practice
The firm said it had also seen material growth in private equity backed M&A and equity capital markets work as well as real estate finance, leveraged and fund finance, and derivatives.
Away from deals, last year was one of consolidation for Ogier after it hived off its fiduciary arm through a management buyout, and in 2016 the firm has rejigged its management. Litigator Edward Mackereth is now global managing partner, while private client expert Steve Meiklejohn has become senior partner. Managing partner Nick Kershaw now chairs the executive board.
It recently launched a global career development programme for all its fee-earners, providing career tracks, competency frameworks and training platforms.