To print this article, all you need is to be registered or login on Mondaq.com.
With the US China trade war, US elections, civil unrest inHong Kong and a global pandemic, 2020 posed enormous challenges forthe investment fund industry in the Asia-Pacific region.
In this interview, excerpts of which originally appeared inAsian Legal Business, Ogier partner and head of ESG Funds in HongKong Kate Hodson discusses how offshore law firms have stepped upto meet this changing business landscape, the ramping up ofregulations, and the growing momentum around ESG.
It's hard to look back at 2020 without focusing on theimpacts of Covid-19. At the start of the year there were liquidityconcerns and a significant number of projects put on hold, withmany of our China deals stalling. However, as lockdowns eased andthe asset management industry in Asia adjusted to "the newnormal", activity quickly resumed. The tech industry inparticular proved very resilient and there were a number ofpandemic-induced opportunities such as in healthcare and thoseindustries benefiting from changing purchasing patterns, with ahuge shift to online spending. However, other key trendsevolved irrespective of the pandemic including increased regulationand the emergence of new forms of fund vehicles.
During my 11 years with Ogier I have seen the team kept busywith increased layering of regulation for funds and asset managers,including in respect of AML, FATCA and CRS, Economic Substance,data protection and so on. 2020 saw a new development in theprivate equity space with private funds domiciled in the CaymanIslands and British Virgin Islands becoming subject to regulation.The new legislation was a result of certain EU and otherinternational recommendations and was developed to align the BVIand Cayman Islands investment fund regulatory regime with otherjurisdictions. In terms of new fund vehicles, Hong Kong andSingapore have been increasingly competing as a funds domicile withHong Kong introducing the new limited partnership fund regime andthe Singapore VCC becoming available.
Despite the increasing choice available to managers in terms offund domicile, we continue to see a strong interest in CaymanIslands fund structures with our 13-strong investment funds team inHong Kong remaining extremely busy for 2020. We have also startedto see more interest in BVI funds and managers in the last 6 monthsas we see some managers accessing differences in regulatorytreatment for their particular structures.
Another key trend has been the momentum around ESG. This hasstarted to translate into new funds products arising in Asia whichincorporate ESG in some form. We have also seen a number ofmanagers indicating interest to bring more ESG strategies to themarket. This reflects a diversification in the sustainableinvestment product bank away from fixed income. Beyond newproducts, we are seeing a number of things happening in the fundsindustry related to ESG, including a spree of hiring individualswith experience in sustainable finance. This is not just into assetmanagement firms but also banks and accounting firms. There hasalso been increased opportunities for new partnerships andco-operations such as in the form of blended finance and NGOsworking with asset managers on fund launches.
We see ESG as a long-term trend as substantiated by thecommitments seen at the levels of government, as well asregulators. As an example, both Hong Kong and Singapore havestarted a consultation process with regards to guiding the assetmanagement industry on climate disclosures and are competitivelypositioning themselves as Asia's green financial centres. Infact, the SFC in Hong Kong is proposing to introduce measures torequire HK licensed fund managers to consider climate related risksin their investment and risk management processes.
The headwinds this last year have been unprecedented, with theglobal impacts of the pandemic, the chaos surrounding the USelections, continued tensions around the US/China trade war,political unrest in Hong Kong and the introduction of the Hong Kongnational security law, to name a few. This has put certainstrategies under particular pressure whilst benefiting others. Italso drove high levels of innovation and adaption with many firmsseeing staff move to remote working for much of the year. Thecircumstances highlighted those with the strongest contingencyplans and technology solutions, with others quickly investing tomeet their technology needs. Operational due diligence also had togo-online in order for deals to be able to push ahead with travelrestrictions in place and social distancing limitations.
Given the significant number of regulatory changes at the startof the year it was important to continue to reach clients andsupport their needs as efficiently as possible. Technology was verymuch at the forefront of the solutions. We were quick to move toonline seminars, rolling out educational series at the start of theyear and continued to deliver these over the course of the year.Further, Ogier's IT infrastructure and common use of testedplatforms allowed us to facilitate a timely move to remote workingand online deal completion.
Ogier has been using an electronic signature product for sometime now and we were able to roll this out to clients who wereunable to provide wet ink signatures. Fortunately, the CaymanIslands has been well placed to adjust to the move to the signatureof documents in electronic form having introduced the CaymanIslands Electronic Transactions Act in 2003.
A key aspect of delivering to clients this year was also seen inthe high levels of collaboration between the offshore law firms aswe came together to ensure that the raft of new regulatory changesfor the funds industry in the BVI and Cayman Islands was dissectedand disseminated in a clear and as consistent manner as possible tosupport the industry. It was very much an industry firstmentality and this was particularly important with clients under somany other strains this last year. The funds team at Ogier alsomade an important new hire in Dave Sherwin to lead a dedicatedregulatory practice in Cayman. Clients have been benefitingfrom this dedicated regulatory support.
Whilst there have been many downsides to the lack offace-to-face interactions in the industry there has also been aresulting efficiency benefit. As an example, we have beenable to attend more conferences this last year than ever before andacross a wider number of jurisdictions as we have been able to doso from the comfort of our homes and offices. However, onlineforums don't offer the same networking opportunities and soextra efforts have been required to stay connected and to continueto expand our connections.
I am sure that to a fund manager it feels like every year, a newfund regulation. Keeping up with all the developments can be a fulltime job. However, one important takeaway is the adaptability ofthe industry. When FATCA and CRS first came out there was a realconcern about how firms would cope with the requirements. However,that seems a long distant memory now and has become a relativelystandard process for funds, largely taken care of by fundadministrators.
One new type of regulation that has perhaps taken managers bysurprise in the APAC region is the gradual introduction of climatechange regulation. Legal frameworks have begun to reflectsupport for the transition to a low carbon economy and thistransition is expected to have a major impact on financial marketsand products in the near to medium term.
The two key offshore regulatory changes affecting our Hong Kongfunds practice was the new regulatory regimes for BVI and Caymanclosed ended fund vehicles. In Asia these have been two of the mostpopular jurisdictions for private equity, venture capital, realestate and credit funds and so the changes affected a significantportion of funds in the closed ended space. Despite the newobligations of having to become registered with a regulator, we sawvery little interest to move out of these jurisdictions to avoidregulation. Rather, most in-scope entities have chosen to registerwith the BVI and Cayman regulators.
Through the process of registration it became apparent thatthere were a lot of Cayman funds out there over 12,200closed-ended entities registered by the August 2020 deadline. Inaddition, there are more than 11,600 open ended hedge fundsregistered with CIMA. Whilst the introduction of the new regimesinitially might have been seen as a bit of shake-up, once againmanagers have adapted. We haven't seen this as detractingfrom the continued interest in Cayman and the BVI for fund set-up,although there is now perhaps a slight uptake in drilling into therespective regulatory treatment of different vehicles in eachjurisdiction.
The start of 2021 has demonstrated a significant amount of pentup activity and we are experiencing a very busy January with asignificant number of new fund launches kicking off and newenquiries. We are cautiously optimistic about the 2021pipeline.
I would expect to see greater levels of sustainable investmentin 2021. In Standard Chartered Private Bank's SustainableInvesting Review 2020 report, a survey of around 1,000 investorswith a focus on affluent and HNW investors in Singapore, Hong Kong,the UAE and the UK, found that 90% of respondents in Asia said theyare interested in sustainable investments and 42% plan to investbetween 5% and 15% in this area over the next 3 years. The pandemichas accelerated and highlighted the importance of sustainabilityand ESG factors as a business strategy for some of the world'slargest companies and this is not a momentum I expect to slow evenas we come out of the pandemic.
Another key trend is likely to be China focused activity withthe further opening up of China to foreign investment, allowingforeign firms to take majority stake ownerships in securities andfund management firms.
Offshore law firms, like any law firm, need to be innovative andforward thinking. Just as is the case for the businesses we advise,law firms need to consider how they build resilience to ensuresustainability. We have an active focus on D&I, the environmentand wellness, in addition to our investment in technology andclient services. The environment has become a particularlybig focus for us. We are building an environmental managementsystem for the firm and have hired a head of sustainability to leadthis process. As an example of innovation, Ogier created anentirely new service line during the pandemic which sets it apart,namely Ogier Global's ESG and Impact Advisory business. Thisservice line, which offers bespoke ESG and Impact design,integration, and implementation solutions, supports clients tonavigate ESG goals and requirements and to leverage the landscapeof sustainable investing opportunities.
Originally Published by Ogier, February 2021
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.
Read the original:
- BASF to Buy Stake in German Offshore Wind Farms From Vattenfall -- Update - MarketWatch - April 22nd, 2024 [April 22nd, 2024]
- Denmark Launches Massive Offshore Wind Auction | Offshore Wind - Offshore WIND - April 22nd, 2024 [April 22nd, 2024]
- rsted and OEG Renewables Form Offshore Wind Pact in US | Offshore Wind - Offshore WIND - April 22nd, 2024 [April 22nd, 2024]
- Vestas and Maersk team up for South Korean offshore wind - Recharge - April 22nd, 2024 [April 22nd, 2024]
- Denmark's offshore wind parks currently generate 2.7 gigawatts of electricity - The Mountaineer - April 22nd, 2024 [April 22nd, 2024]
- rsted Buys Sunrise Wind Stake from Eversource - Offshore WIND - April 22nd, 2024 [April 22nd, 2024]
- 'More non-turbine challenges' | GE hits back in New York round 3 offshore wind demise - Recharge - April 22nd, 2024 [April 22nd, 2024]
- 'Heart-breaking': Refugees once detained offshore by Australia warn the UK government not to push through its ... - The Albany Herald - April 22nd, 2024 [April 22nd, 2024]
- Hearing scheduled this week on bill to advance offshore wind - delawarebusinessnow.com - April 22nd, 2024 [April 22nd, 2024]
- Aker BP begins production from Hanz field offshore Norway - Offshore Technology - April 22nd, 2024 [April 22nd, 2024]
- Denmark launches its biggest offshore wind farm tender - The Caledonian-Record - April 22nd, 2024 [April 22nd, 2024]
- Vestas and Maersk to Build Offshore Wind Hub in South Korea | Offshore Wind - Offshore WIND - April 22nd, 2024 [April 22nd, 2024]
- U.S. Navy To Convert Oil Rigs Into Offshore Military Bases To Counter China In The Pacific - Marine Insight - April 22nd, 2024 [April 22nd, 2024]
- BASF seals deal to buy into gigascale Vattenfall offshore wind to power chemicals complex - Recharge - April 22nd, 2024 [April 22nd, 2024]
- First Moray West 14.7MW Offshore Wind Turbine Comes Up - Offshore Engineer - April 22nd, 2024 [April 22nd, 2024]
- NYSERDA concludes New York's third offshore wind solicitation without final awards - 4C Offshore - April 22nd, 2024 [April 22nd, 2024]
- Galp Energia says Namibia offshore field could contain 10B barrels of oil - Seeking Alpha - April 22nd, 2024 [April 22nd, 2024]
- Framework Agreement signed with rsted in the US - 4C Offshore - April 22nd, 2024 [April 22nd, 2024]
- A submerged concern: offshore wind cables - Martha's Vineyard Times - April 22nd, 2024 [April 22nd, 2024]
- Possible human smuggling operation thwarted offshore in South Florida - cw34.com - April 22nd, 2024 [April 22nd, 2024]
- Maersk sets sights on offshore wind logistics in South Korea - Splash247 - Splash 247 - April 22nd, 2024 [April 22nd, 2024]
- Brigantine, Ventnor respond to offshore wind suit dismissal - Press of Atlantic City - April 22nd, 2024 [April 22nd, 2024]
- Denmark launches 6GW offshore wind tender with an eye on production of green hydrogen and e-fuels - Hydrogen Insight - April 22nd, 2024 [April 22nd, 2024]
- Trump says he hates wind power at fundraiser with oil executives - The Washington Post - April 22nd, 2024 [April 22nd, 2024]
- Humboldt County Officials Headed to Massachusetts Next Week to Check Out Vineyard Offshore's Wind Farm - Lost Coast Outpost - April 22nd, 2024 [April 22nd, 2024]
- 3 More Offshore Wind Projects Bite the Dust - Heatmap - April 22nd, 2024 [April 22nd, 2024]
- Europe's First Commercial-Scale Floating Offshore Wind Farm Secures All Planning Approvals | Offshore Wind - Offshore WIND - April 22nd, 2024 [April 22nd, 2024]
- OEG Renewables lands US offshore wind contract with rsted - Energy Voice - April 22nd, 2024 [April 22nd, 2024]
- Vattenfall and BASF sign purchase agreement for 49 percent of Germany's Nordlicht offshore wind farms - Vattenfall - April 22nd, 2024 [April 22nd, 2024]
- House Republicans ask Gov. Moore to veto offshore wind financing bill - Ocean City Today - April 22nd, 2024 [April 22nd, 2024]
- Enterprise Products Partners Granted MARAD Port License For Biggest Offshore Oil Export Terminal In U.S. - Marine Insight - April 10th, 2024 [April 10th, 2024]
- RWE Wants to Expand Supply of Fiber Cables for Floating Offshore Wind - The Maritime Executive - April 10th, 2024 [April 10th, 2024]
- US unveils next steps in its 20242029 Gulf of Mexico oil & gas leasing program - Offshore Energy - April 10th, 2024 [April 10th, 2024]
- Romania adopts offshore wind energy law to get first megawatts by 2032 - Balkan Green Energy News - April 10th, 2024 [April 10th, 2024]
- Baltic Sea nations turn to Nato and EU to protect offshore infrastructure from Russian threats - Recharge - April 10th, 2024 [April 10th, 2024]
- Canadian Pension Fund to Consolidate Its Offshore Wind Holdings into UK-Based Reventus Power | Offshore Wind - Offshore WIND - April 10th, 2024 [April 10th, 2024]
- Australia urged to ensure its gas strategy features LNG opportunities - Offshore Energy - April 10th, 2024 [April 10th, 2024]
- Taiwan's offshore wind power moves forward. - 4C Offshore - April 10th, 2024 [April 10th, 2024]
- Siem Offshore lines up multi-year gig for 2016-built oil spill response vessel in Brazilian waters - Offshore Energy - April 10th, 2024 [April 10th, 2024]
- Poland's Largest Offshore Wind Project Readies for 2025 Auction | Offshore Wind - Offshore WIND - April 10th, 2024 [April 10th, 2024]
- New assignment for Wood in Trinidad and Tobago - Offshore Energy - April 10th, 2024 [April 10th, 2024]
- SalMar 'won't build offshore farms in Norway without ground rent tax' - FishFarmingExpert - April 10th, 2024 [April 10th, 2024]
- SLO County fishermen sue Coastal Commission, offshore wind companies. Weve got rights here - San Luis Obispo Tribune - April 10th, 2024 [April 10th, 2024]
- New floating offshore wind partnership committed to Celtic Sea - 4C Offshore - April 10th, 2024 [April 10th, 2024]
- Norwind Offshore's CSOV to Feature Seaonics Fully-Electric Crane - Offshore WIND - April 10th, 2024 [April 10th, 2024]
- Eversource's Offshore Wind Lessons Have Created A Buying Opportunity (NYSE:ES) - Seeking Alpha - April 10th, 2024 [April 10th, 2024]
- FERC approves collaboration between PJM, New Jersey to boost offshore wind - Daily Energy Insider - April 10th, 2024 [April 10th, 2024]
- April 10 Golden Knights vs Oilers NHL Offshore Betting Odds, Preview - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- Arsenal vs Aston Villa EPL Offshore Odds, Preview, and Prediction - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- O&Gs emissions reduction roadmap and the importance of refinery efficiency - Offshore Technology - April 10th, 2024 [April 10th, 2024]
- West Ham vs Fulham EPL Offshore Odds, Preview, and Prediction - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- Liverpool vs Crystal Palace EPL Offshore Odds, Preview, and Prediction - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- April 10 Astros vs Royals MLB Offshore Betting Odds, Preview - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- RS helps propel offshore wind farm initiative in education sector - The Manufacturer - April 10th, 2024 [April 10th, 2024]
- Bournemouth vs Man United EPL Offshore Odds, Preview, and Prediction - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- Grand National Offshore Odds, Preview, and Prediction (2024) - The Latest Sports Betting News - OffshoreSportsbooks.com - April 10th, 2024 [April 10th, 2024]
- Tyra, a State-of-the-Art Offshore Gas Hub in the North Sea - Total - April 10th, 2024 [April 10th, 2024]
- 50Hertz to start onshore works for Windanker offshore wind farm - Power Technology - April 10th, 2024 [April 10th, 2024]
- Fund manager Pelagic teams up with Borealis Maritime to expand offshore fleet - TradeWinds - April 10th, 2024 [April 10th, 2024]
- Another LNG carrier gets Silverstream's air lubrication tech at Seatrium - Offshore Energy - April 10th, 2024 [April 10th, 2024]
- VIDEO: EPS splashes USCG's first Heritage-class offshore patrol cutter - Naval Today - November 2nd, 2023 [November 2nd, 2023]
- N.J.s election focusing on abortion and offshore wind - WHYY - November 2nd, 2023 [November 2nd, 2023]
- Business Network for Offshore Wind changes name to Oceantic ... - WorkBoat - November 2nd, 2023 [November 2nd, 2023]
- Geotechnical Surveys Completed at Scottish 3.6 GW Floating ... - Offshore WIND - November 2nd, 2023 [November 2nd, 2023]
- Fitch downgrades Eversource outlook to 'negative' on uncertainty ... - Utility Dive - November 2nd, 2023 [November 2nd, 2023]
- Kongsberg & Solstad Offshore to Collaborate on Decarbonisation ... - The Maritime Executive - November 2nd, 2023 [November 2nd, 2023]
- Second BOEM in-person hearing on offshore wind generates ... - Ocean City Today - November 2nd, 2023 [November 2nd, 2023]
- NOV Earnings: Offshore Remains Central Performance Driver as ... - Morningstar - November 2nd, 2023 [November 2nd, 2023]
- Murphy eyes first oil in 2026 from offshore project in Southeast Asia - Offshore Energy - November 2nd, 2023 [November 2nd, 2023]
- CorPower Ocean's wave energy device weathers through two major ... - Offshore Energy - November 2nd, 2023 [November 2nd, 2023]
- Somerset offshore wind plant clears major hurdle - CommonWealth magazine - November 2nd, 2023 [November 2nd, 2023]
- In a 'world first,' autonomous giant drones are flying cargo to offshore ... - Electrek - November 2nd, 2023 [November 2nd, 2023]
- Port of VA Receives First Massive Offshore Wind Components - Chesapeake Bay Magazine - November 2nd, 2023 [November 2nd, 2023]
- HBA Future Energy to Build 532 MW Anma Offshore Substation - Offshore WIND - November 2nd, 2023 [November 2nd, 2023]
- PGE, rsted Gather Tier 1 Offshore Contractors for 1.5 GW Baltica 2 - Offshore WIND - November 2nd, 2023 [November 2nd, 2023]
- Philippine police unearth 'torture chamber' in sex den licensed as ... - The Straits Times - November 2nd, 2023 [November 2nd, 2023]
- CIP & Co Release Findings of Taranaki Offshore Wind Capability ... - Offshore WIND - November 2nd, 2023 [November 2nd, 2023]
- UK offshore wind stands up to Storm Ciaran - reNEWS - November 2nd, 2023 [November 2nd, 2023]
- Hatteras Offshore Open kicks off billfish series - The Coastland ... - The Coastland Times - May 18th, 2023 [May 18th, 2023]
- Anna Paulina Luna to feds: Study dangers of offshore wind turbines - Tampa Bay Times - May 18th, 2023 [May 18th, 2023]