Fireside chat with Peter Vas
Fireside chat with Peter Vas, Corporate and Finance Partner in Loeb Smithâ€™s Hong Kong office practising British Virgin Islands and Cayman Islands law.
Peter Vas is a Partner in the firm’s Banking & Finance and Corporate Groups in Hong Kong practising British Virgin Islands (“BVI”) and Cayman Islands law. We have invited him to provide some background to himself, his practice, and his insight on recent market developments and trends in the legal market in Asia.
Loeb Smith (“LS”): Peter, could you provide a brief overview of your current practice?
PV: I advise on matters of BVI and Cayman Islands law with respect to banking & finance, corporate and restructuring transactions. I am based in our office in Hong Kong, but offshore law knows no boundaries and my clients are international in nature. I predominantly act for financial institutions, listed companies, private equity and venture capital investors and other corporate clients with a presence in Asia.
LS: Can you share more about your background?
PV: I started my career at Sidley Austin in London, prior to relocating to Jersey in the Channel Islands to join an international offshore law firm. I was then seconded to Hong Kong in 2015 and have practised BVI and Cayman Islands law ever since. My focus has consistently been on a mix of banking & finance, corporate and restructuring matters which makes the work interesting and varied.
LS: Since joining the firm in 2020, you have been successful to date in your ability to earn the confidence of high-profile clients. For example, you have been described as “extremely responsive”, “hardworking and diligent”, “knowledgeable and thorough” and “solutions-oriented” by your clients in the Asian Legal Business Offshore Client Choice List 2022 and the Asia Business Law Journal A-List of Offshore Lawyers 2022. What do you attribute that to?
PV: I am passionate about my role and enjoy developing lasting relationships with clients. I appreciate the time that my clients took to provide such positive feedback because we are, as a firm, deeply committed to exceeding client expectations and providing responsive and high-quality service. Being commercially focused also goes a long way in this market.
LS: From those which you can disclose, what do you think are the most challenging client matters that you have worked on?
PV: A couple of deals come to mind, including the financing of the privatization of Global Logistic Properties, which was Singapore’s largest M&A deal on record and Asia’s largest private equity buyout at the time of the transaction, the restructuring of nearly 17 billion yuan in offshore debt involving around 70 offshore vehicles in connection with certain notes issued by the Kaisa Group, the acquisition of Trans Maldivian Airways by a consortium led by Bain Capital and the financing of Dolphin Square involving around 500 offshore SPVs. These were all large, cross-border transactions that were heavily negotiated and complex in nature. I also advised China Shipbuilding Industry Corporation on its first ever ship lease financing which is memorable.
LS: What types of transactions have you recently been asked to advise on?
PV: We have continued to be engaged on a wide variety of corporate and finance transactions. For example, we recently advised ProLogium on its US$326 million funding round from New Epoch Capital, Primavera Capital Group and SoftBank China Venture Capital, as well as an investment from Mercedes-Benz. We are also advising a large number of private equity and venture capital investors on other series financing transactions, which is consistent with 2021 being a record year in Asia for these types of deals. Take-private transactions, mergers and acquisitions and secured lending transactions have also continued to be prevalent, particularly across the technology and real estate sectors.
LS: Last year, we asked you whether you see SPACs becoming as popular in Asia as they are in the U.S. You responded that Asia’s more conservative approach to SPACs is unlikely to match deal-flow in the U.S. Have these predictions turned out to be correct?
PV: Yes, these predictions have materialized. Asia’s financial markets are reliant on a steady stream of initial public offerings to remain competitive so whilst a regulatory framework for SPACs in Hong Kong and Singapore was widely expected, deal volumes have stagnated. Whilst this is arguably largely due to declining equity prices and an increasingly negative market outlook, high redemption rates and poor post-de-SPAC performance have also contributed to this trend.
One positive takeaway from an offshore perspective is that the SPAC regimes in each of Hong Kong and Singapore expressly permit BVI and Cayman Islands companies to act as the SPAC SPV despite certain indications in the initial consultation period that this would not be allowed. Offshore companies have proven to be popular in this space due to the flexibility which they offer. For example, Temasek-backed Vertex Technology Acquisition Corporation, an exempted limited company incorporated in the Cayman Islands, was the first SPAC listed on the Singapore Exchange .
LS: You have recently advised on a lot of series finance transactions. What is driving this trend?
PV: 2021 was arguably the best year on record for investment activity in Asia. This is because investor appetite was strong across companies in all stages of their lifecycles. For example, angel and seed round investments raised US$5.3 billion in Asia in 2021, representing a 53% increase from 2020. A total of US$49.7 billion was invested into early-stage companies in Asia as well, representing an increase of around 88% compared to 2020. Investments into late-stage companies increased by 37% from 2020, totaling US$110 billion in 2021.
Preqin estimates show that there was around US$2.28 trillion in total global dry power as of 18 August 2021. Of this, around 27% is held by Asian firms. We therefore predict that private equity and venture capital deal-making will continue to see an abundance of activity in 2022 in Asia, particularly in the life sciences and the technology sectors.
LS: 2021 saw a large number of Chinese companies being taken private from NASDAQ and the NYSE. Do you foresee that this trend will continue in 2022?
PV: Yes, without a doubt. This is the culmination of various steps that have been taken by the U.S. and Chinese authorities that has made a U.S. listing less attractive, such as the implementation of the Holding Foreign Companies Accountable Act, enhanced levels of scrutiny around variable interest entity structures and the blacklisting of Chinese companies. Chinese companies have historically also benefited from a better valuation on an Asian stock exchange.
LS: Lastly, are there any other developments and/or trends in the legal market in Asia that you see over the next 6 to 12 months?
PV: Arguably in large part due to the prolonged nature of the Covid-19 pandemic, support for environmental, social and corporate governance issues has continued to be adopted by many funds, international corporations and financial institutions. This is in addition to the significant growth of sustainability linked loans and green bonds across the region, as well as the harmonization of “green standards”. Offshore vehicles continue to be attractive in green financing transactions despite the fact that greenwashing continues to be a concern.
We have also seen considerable activity in the fintech sector and in the blockchain technology space, including in relation to cryptocurrency funds, de-fi transactions and tokenized funds. The BVI has continued to attract virtual assets businesses seeking to capitalize on its status as a leading offshore financial center. Although the BVI is currently developing a bespoke regulatory framework with respect to digital assets, we predict that the BVI will continue to be very popular with fintech businesses in Asia and beyond for the issuance of non-fungible tokens (NFTs) and other digital tokens due to an efficient route to market and cost-competitive edge.
LS: Thanks for your time, Peter.
For enquiries, please contact Peter using the following details:
E: [email protected]
T: +852 5225 4920
A: 1101 Beautiful Group Tower | 77 Connaught Road Central | Central | Hong Kong
Peter is recognized as a leading offshore lawyer in the Asian Legal Business Offshore Client Choice List 2022 and the Asia Business Law Journal A-List of Offshore Lawyers 2022.
About Loeb Smith Attorneys
Loeb Smith is an offshore corporate law firm, with offices in the British Virgin Islands, the Cayman Islands, and Hong Kong, whose Attorneys have an outstanding record of advising on the Cayman Islands’ law aspects and BVI law aspects of international corporate, investment, and finance transactions. Our team delivers high quality Partner-led professional legal services at competitive rates and has an excellent track record of advising investment fund managers, in-house counsels, financial institutions, onshore counsels, banks, companies, and private clients to find successful outcomes and solutions to their day-to-day issues and complex, strategic matters.