Donald Trump is still in office, Brexit is still about to happen, but the global economy in 2018 provided few of the seismic shocks that have reverberated offshore in recent years. Uncertainty remains a continuous theme, although there were none of the revelations like the Panama Papers of 2016 and the Paradise Papers in 2017, both of which generated big headlines but ultimately little impact.
The media attention has been underpinned by what Ingrid Pierce, global managing partner of Walkers, calls ‘a deliberate unwillingness to understand the benefits of international financial centres to the global economy’. Offshore reputation remains a concern for Michael O’Connell, Appleby’s group managing partner. ‘Considering the escalating media, political and regulatory scrutiny that the industry is under, combined with the pressures of an uncertain economic environment, there is a continued need to focus on perception and reputation,’ he says. ‘Any large mistakes are likely to be blown out of proportion in the current climate.’ Continue reading “Offshore leaders’ year in review: Under pressure”
The inferno of disputes arising from the financial crisis is finally being reduced to embers. Although this may have caused the volume of commercial litigation in London to plateau, disputes in the main Caribbean offshore centres continue to be very buoyant: several firms report significant double-digit revenue growth in their dispute resolution teams over the past 12 months.
Driven by different dynamics, the Cayman Islands, the British Virgin Islands (BVI) and Bermuda have each developed in their own right as sophisticated jurisdictions in which to litigate – supplemented by the expansion of specialist commercial courts, a raft of high-quality judges and a regular flow of top-drawer London silks to argue significant cases. Continue reading “Offshore disputes: Centre of the cyclone”
Carlyle, Tchenguiz and Crociani are cases repeatedly cited by the leading players in Jersey and Guernsey as shorthand for big disputes and big fees. These cases just keep on giving: all three are now subject to further appeals or related proceedings, prolonging their life in litigation terms. Elsewhere, the mood among local dispute resolution and insolvency lawyers is generally upbeat. Although less high-profile litigation might not deliver the big headlines, there is enough going on below the radar for revenues to remain healthy.
‘Insolvency-related disputes are still a significant source of work globally,’ says Jeremy Wessels, Mourant’s head of litigation and dispute resolution. ‘Other areas where we have seen increased activity include trust-related litigation, regulatory, debt restructuring, cross-border enforcement and go-private transactions.’ Mourant remains the biggest Channel Islands firm for disputes with 25 lawyers in Jersey (five partners and 20 other fee-earners) and 23 (six and 17 respectively) in Guernsey. Continue reading “Offshore disputes: Big fish, small pond”
Global stock markets rose by 22% in 2017, according to the Morgan Stanley Capital International index of bourses. Meanwhile, the World Bank is forecasting global economic growth to increase to 3.1% this year after a better-than-expected 2017 as investment, trade and M&A continue to rebound while commodity prices recover. Against this favourable economic background, it is no surprise that offshore law firms had another very good year.
But there were some local difficulties. Hurricane Irma and Hurricane Maria created havoc across the Caribbean, not least in the British Virgin Islands (BVI). ‘It had a devastating impact on the lives of our BVI colleagues,’ says Jonathan Rigby, managing partner of Mourant Ozannes. ‘None of us will ever fully understand what they have been through, but their strength of character and resilience has been truly humbling.’ Continue reading “The offshore elite in review – rolling with the punches”
Think offshore centre and certain calm images spring to mind: elegant yachts, crystal blue water, sparsely-populated beaches and gently sloping palm trees. However, in September this idyllic cliché was superseded in the public consciousness by horrific scenes of destruction as Hurricane Irma and then Hurricane Maria ripped through the Caribbean. The British Virgin Islands, where nine of the top ten offshore law firms have an office and nearly 400,000 offshore companies are registered, were catastrophically affected.
Favoured by Chinese companies in Hong Kong for more than 30 years, ‘a BVI’ is shorthand for an offshore company, so renown is its status. But while the narrative coming out of the British Overseas Territory has been defiant with Lorna Smith, interim executive director of BVI Finance, saying there was ‘no doubt’ it will fully return, it could take some time before full operational normality as a commercial and litigation centre is restored. At press time, the territory’s company register continued to function via the online portal, VIRRGIN and just prior to the disruption, company incorporation certificates were sent to London by the BVI Financial Services Commission to have them issued there. The commercial division of the High Court had resumed and matters were being heard by the commercial judge sitting in nearby St Lucia in person, or by teleconferencing or videoconferencing if agreed by the parties. Continue reading “Offshore: Riding the storm”
Despite a year of pronounced headwinds, our annual focus on the ten largest offshore firms reveals that 2016 activity levels remained robust with an increasing focus on Asia and continued strength in dispute resolution. However, among the leadership of these firms there is little doubt that Brexit has had an inevitable effect on performance.
‘The reality of Brexit has and will continue to impact business as much as the prospect of Brexit has done,’ says Jonathan Rigby, managing partner at Mourant Ozannes. Continue reading “The year offshore in review – The Iron Islands”
On April Fool’s Day this year, Panamanian law firm Mossack Fonseca & Co notified its clients that it had sustained an email hack. It instantly became the world’s best-known law firm following the leak of 11.5 million documents, cherry-picked by global media outlets, that revealed confidential client information. The Panama Papers made news and so did offshore law firms. Again.
But for every offshore firm, regardless of jurisdiction, the Panama Papers leak was no laughing matter: the inevitable public outcry further fuelled the enduring debate over tax and transparency. Continue reading “Standing apart – the offshore fallout from the Panama Papers”
‘The morning after the night before, there was stunned silence,’ says David Cadin, managing partner at Bedell Cristin. For offshore law firms, the long-term implications of Brexit are no clearer than for their onshore counterparts and they are equally loath to make predictions when uncertainty continues to surround terms for the UK’s departure from the EU.
As Antonia Hardy, Cayman Islands managing partner of Walkers, puts it: ‘In terms of offshore access for financial services, no-one knows yet – like everything to do with Brexit the answer is possibly and hopefully.’ She offers a very positive take: ‘Offshore centres have always been required to apply for European access independently of the UK and so we do not foresee any negative impact from the Brexit decision.’
Continue reading “Aftermath – the offshore world post the Brexit vote”
The offshore transactional market continues to go from strength to strength. Our annual focus on the ten largest offshore firms again reveals impressive activity levels during the last year. According to Appleby’s recent private equity report, during the third quarter of 2015 deal activity was even more robust than usual: there were 660 offshore deals during the quarter, worth a total of $60.7bn. Of those, 26 involved private equity firms either acquiring or disposing of their investments. With a combined worth of $16.1bn, private equity deals therefore represented over a quarter of total offshore activity by value in Q3 2015.
Material growth in private equity-backed M&A is a trend that looks set to continue, according to Ogier global managing partner Nick Kershaw. ‘The asset classes are diverse, from real estate to trust companies, but there is consistent acquisitive appetite,’ he says. Ogier acted on several high-profile deals in 2015, such as providing Jersey law advice to Palamon Capital Partners on the £200m joint acquisition with Corsair Capital of Currencies Direct.
Continue reading “Standing tall – 2015 in review for the offshore elite”
In July, global offshore firm Appleby announced the management buyout (MBO) of its fiduciary business for an undisclosed sum, backed by private equity house Bridgepoint. Completion is subject to regulatory and legal approvals, but is expected to wrap up by the end of 2015.
According to group chair Frances Woo, the sale had been considered for some time, so that the fiduciary arm could continue to develop new products while the legal side could invest in new technology and knowledge management going forward.
Continue reading “Making gains – to be or not to be in the fiduciary business”