Walkers is one of the most recognised international law firms and works with some of the hedge fund industry’s largest asset managers. In total, the Group has 580 personnel, of which 250 alone are based in the Cayman Islands. “Overall, we’ve hired 100 people globally this year to bolster our five core practices: investment funds, finance & corporate, insolvency & dispute resolution, wealth structuring, and tax and regulatory advice,” says Ingrid Pierce (pictured), Global Managing Partner at Walkers.
Pierce also notes that corporate and fiduciary services (through ‘Walkers Professional Services’) are a rapidly growing business for the firm since it was re-launched in March 2015 on the back of significant client demand.
With respect to fund activity, she says that whilst Walkers has been instructed on a number of exciting new launches, overall the pace of new funds coming to market has slowed a little compared to a year or two ago.
“I think what is happening is the large funds are getting larger. This is taking new managers longer to get to market as a result, and people are being more thoughtful at the pre-launch phase. Indeed, this is one of the key trends we’ve seen in 2016,” comments Pierce.
Previously, managers would charge ahead and launch hedge funds with the portfolio manager and one or two other people. As a business structure, they tended to be inchoate.
Now, says Pierce, “we are seeing launches with a full team in place; the CIO, the CFO, CCO, some have general counsel, and other in-house staff. I think that illustrates the continued institutionalisation of the hedge fund market.”
One particular start-up manager that Walkers is working with is set to be a significant launch yet only has two institutional investors. “The manager in question has a very good name and has spun out of a highly recognised hedge fund group. They have significant seed capital in place. That is why they can afford to build out the entire team.
“We’ve seen some terrific managers who launched maybe two or three years ago, looked very promising, did everything right, but found it difficult to maintain AUM because of one large redemption and we ended up advising them on restructuring or liquidating. The industry is very challenging for most small managers today,” says Pierce.
A second trend that Pierce has observed this year is a continued increase in governance. She notes that as managers take this more seriously some have re-structured their governance model or put in place independent advisory boards at the behest of their institutional investors.
“It’s about having independence at different levels,” states Pierce. “First, with respect to the fund structure it’s now market standard to have independent oversight, and there has been a trend towards split boards. I would estimate that 80% of new funds that are launched have split boards.
“Second, if there are Master Fund structures that don’t have an independent board of directors, managers are looking to put in place some sort of advisory board that replicates the role of the independent director (for the feeder fund) with a view to creating an additional layer of governance and oversight.”
On winning this year’s award, Pierce says: “With our global footprint we have a good understanding of the markets and regulations and this has helped to cement our reputation. We couldn’t be more pleased to be Hedgeweek’s best offshore law firm.
News Source: Hedgeweek