Offshore Report | April 2021 Queen’s Gambit: Walkers riding the SPACs wave Focus: Hong Kong at a Crossroads ogier.com We get straight to the point, managing complexity to get to the essentials. Every piece of work is a collaboration. We listen actively, asking the right questions, focused on what really matters. We deliver targeted, pragmatic advice with absolute clarity. To the point. Legal services British Virgin Islands Cayman Islands Guernsey Hong Kong Jersey London Luxembourg Shanghai Tokyo April 2021 | Offshore Report Contents Offshore elite firms thrive despite challenges 4 The SPACs phenomenon 10 Queen’s Gambit – a different kind of SPAC 16 Gibraltar: a hub for crypto entrepreneurs 18 Hong Kong at the crossroads 22 Editor: Designer: Chris Morrish Dominic Carman Creative Director, Pagelab T: +44 (0)7930 644201 www.pagelab.co.uk Reports Legal E: [email protected] Research Legal Ltd Consultant: Alex Berry Creative Director, Maltin PR Kemp House www.maltinpr.com Business Director: 160 City Road James Air Sub-editor: Laura Air London EC1V 2NX T: +44 (0)7557 258410 Research: Rachel Carman E: [email protected] Digital Publisher: PageSuite www.pagesuite.com 3 Offshore Report | April 2021 Offshore elite firms thrive online despite challenges Dominic Carman examines how offshore law firms have flourished during the Covid-19 pandemic he offshore market is major OFCs have fared over the ▲ For the divided between the Caribbean complex: each offshore past year, the phenomenal rise of offshore elite, and the Channel Islands. Three it has been financial centre (OFC) has offshore SPACs (special purpose are British Overseas Territories: T business almost unique characteristics although acquisition companies) during the as usual during Bermuda, the British Virgin they still compete with one Covid-19 pandemic, Gibraltar’s the past year Islands (BVI) and the Cayman another in multiple areas of growth as a crypto-friendly Islands; the other two are Crown business. Collectively, OFCs jurisdiction and the future role Dependencies – Jersey and provide significant levels of of Hong Kong as a key source of Guernsey. regulatory and tax competition offshore business. The combined footprint of for their onshore counterparts, Primarily through mergers, the these firms has almost doubled but they are also complementary largest offshore law firms have since the global financial crisis. to their financial activities. developed their international Their growth has coincided This report seeks to examine office networks from a domestic with increased globalisation, how law firms operating in the base in one of five jurisdictions, greater transparency and tighter 4 April 2021 | Offshore Report regulation. As the markets in which they operate become ever more sophisticated, their response is to become ever more specialised. ‘A very busy year’ For the offshore elite, it has been business almost as usual during the past year, albeit in the most unusual of circumstances. ‘We noticed immediately that workflows were high, more or less across the board,’ says Christian Luthi, chairman of Conyers. ‘We monitored it extremely closely because we were concerned about things falling off a cliff, since no one knew what to expect. It became clear that, not only were things remaining solid, but it was turning out to be a very busy year. That has translated into very lucky,’ says Jason Romer, group decent revenues.’ ❝ We were concerned managing partner at Collas Crill. Maples and Calder’s global ‘We were able to move our managing partner, Jonathan about things falling off a business remotely pretty much Green, summarises events: ‘All of cliff...but it turned out to be over a weekend. Every system we our practice areas and business had in place worked incredibly lines continue to be busy and a very busy year well.’ Phillip Kite, Harneys global the last 12 months have truly head of litigation, agrees. ‘All the demonstrated the resilience, Christian Luthi, chairman, Conyers IT seemed to work, especially in dedication and expertise of our London, Hong Kong and New lawyers, who all responded Tech dividend York, where law firms were incredibly well to the pandemic, Pre-Covid investment in tech already set up for remote access,’ all while keeping client service certainly helped to keep activity he says. levels at an all-time high,’ he says. flowing, as Alex Ohlsson, group Internationally, law firms ‘We are very proud to have been managing partner of Carey Olsen, have coped very well, confirms able to promote a record number explains. ‘The existing technology Walkers’ global managing of our lawyers across six of our responded incredibly well to a partner, Ingrid Pierce. ‘Certainly, international locations.’ working from home strategy,’ those who invested in If lateral hires provide a further he says. ‘It’s remarkable how technology have been able to litmus test of success, then Maples many businesses have had that manage the pandemic so that had a very good year as multiple experience.’ 13.4% it’s almost business as usual,’ she partners also joined the firm: in Jonathan Rigby, global Average PEP adds. Ireland, Claire Morrissey from A&L managing partner of Mourant, Goodbody and Lorna Smith from adds: ‘We were able to increase at Revenues grow Matheson; in Luxembourg, Jean- switch almost overnight to a Am Law 100 In the world’s largest legal Dominique Morelli from CMS; virtual working environment. firms last market, it has been more than in Hong Kong, Nick Stern from Immediately before the pandemic, year just business as usual. US law Freshfields Bruckhaus Deringer; we had completed the successful firms have never had it so good and in Jersey, Mark Crichton from deployment of a fully paperless, – at least according to a recent Walkers and Tim Morgan from mobile-enabled client on- report by Thomson Reuters, Mourant. Previously a barrister at boarding system, which really which concluded that average 8 New Square in London, Quentin came into its own last year.’ profits per equity partner at the Cregan also joined as a partner in A similar picture emerges Am Law 100 firms increased by Cayman. elsewhere. ‘We’ve been very an extraordinary 13.4% last year. 5 Offshore Report | April 2021 Unlike their onshore will there be more insolvency counterparts in the UK who have ❝ We started off 2020 with related restructurings? I think, to file LLP accounts which then absolutely yes.’ become a matter of public record, 570 to 580 people and we It was a similar story at Walkers. offshore firms are distinctly coy ended last year with around ‘We’ve seen as a real increase about disclosing details of their in certain types of restructuring, financial results. While they may 660 people as a direct result notably in oil and gas, and not have done quite as well as obviously the airline and travel firms in London or New York, of client demand sector,’ says Pierce. Ohlsson some double-digit growth has has also seen a big uptick in still been achieved during the Edward Mackereth, global refinancing and restructuring, pandemic. managing partner, Ogier particularly in private equity- Edward Mackereth, Ogier’s owned businesses. ‘Restructuring global managing partner, gives (ESG). Ogier has also seen a big insolvency and the consequential an indication of just how well his uptick in parallel structures with litigation that arises from it have firm has prospered in challenging Luxembourg – often US vehicles been a significant growth area,’ circumstances. ‘I’m not going to structured through Cayman he says. discuss our profitability,’ he says. (CALUX products) – and a steady Rigby provides a panorama ‘But to give you an idea of how increase in traditional hedge fund of Mourant’s business. ‘BVI we have fared, we started off product launches. insolvency and restructuring 2020 with 570 to 580 people and continues to account for a we ended last year with around Debt and restructuring large share of our work in Asia, 660 people, as a direct result of At Conyers, there has been ‘a fair with much of the remainder client demand.’ share of restructuring work and comprising shareholder disputes, So what has been fuelling a lot of significant debt financing often with an asset tracing demand? Funds have been very work – Carnival and other large element,’ he says. strong at Ogier. In particular, cruise ship and container lines’, Although there is continued Mackereth points to the says Luthi. ‘Immediate debt growth in contentious development of impact and financing is needed in a crisis regulatory work in Jersey and sustainable investment funds situation and markets were happy Guernsey, Rigby has yet to see – legal and advisory services – to oblige. The question is: if this a significant uptick in insolvency primarily based out of Hong Kong, gets more embedded and you’re and restructuring instructions. in relation to Environmental, into a longer-term scenario, will Whereas in Cayman, the airlines Social, and Corporate Governance the wheels start to come off, and sector has been busy and 6 conyers.com Legal Advice Corporate & Trust Services Global Experience Local Knowledge Proven Results YOUR LEGAL EXPERTS Offshore Report | April 2021 Mourant has been advising on some high-profile restructurings. In retail, the firm advised Tailored Brands on its Chapter 11 restructuring. Fundraising has also been robust, according to Ohlsson, as Carey Olsen’s strong funds practice continues apace. Covid’s economic impact has been counterintuitive: in a normal downturn, fundraisings would reduce. Instead, the cycle has been