Please give us an overview of the current legal market in Jersey and how any recent developments have impacted your practice?
2017 was a relatively busy year for Jersey M&A activity, reflecting the global market. Despite the current global geopolitical and regulatory concerns, the high number of deals seen in the last three years is looking to continue throughout 2018.
There has been no material legal developments in the M&A space in Jersey. However, a new demerger regime for Jersey companies will come into force on 1 September 2018 (pursuant to the Companies (Demerger) (Jersey) Regulations 2018) which may provide an alternative to a court sanctioned scheme of arrangement. As these regulations should result in significant cost and time savings for those looking to divide the undertaking, property, rights and/or liabilities of a Jersey company, we may see a rise in the number of restructurings of Jersey companies. We note that certain Jersey companies will not be able to utilise these new regulations, including companies registered to carry out banking business in or from within Jersey and companies holding a permit to carry out insurance business in or from within Jersey.
New limited liability partnerships legislation is also expected to come into force in the second half of 2018 which will also modernise Jersey’s limited liability partnership laws and aims to make Jersey LLPs more competitive for use as a vehicle of choice.
What significant trends exist in the M&A market presently? Are you seeing these just domestically or internationally as well?
We are seeing continued consolidation between fiduciary and fund services providers on the Island. There is also a large number of insurance restructuring and consolidation taking place, which reflects the position in the UK surrounding Brexit.
Jersey is also working to establish itself as a leading FinTech and cryptocurrency hub (with a number of ICOs having occurred on the Island in the first half of 2018) which may open new opportunities for watchful buyers.
What are the three biggest challenges to practising M&A in Jersey at the moment?
At the time of writing, we consider the three biggest challenges to M&A activity in Jersey to be:
Political uncertainties including Brexit in Europe, the midterm elections in the US and Chinese government scrutiny over outbound deals;
US and UK tax and regulatory reforms; and
Current macroeconomic and geopolitical factors influencing Jersey transactions.
How does M&A fit into the firm as a whole? Is it easy to collaborate with other teams?
Appleby are experts in offshore corporate, finance, funds, restructuring and dispute resolution. The M&A team plays a central role in Appleby’s wider corporate and finance offering and is comprised of industry experts with deep knowledge of private equity, energy, insurance, banking, healthcare, real estate, media, telecommunications, investment products, regulatory matters and FinTech.
Given the cross-jurisdictional nature of many M&A transactions that we work on, our Jersey teams routinely work closely alongside the corporate and finance practices of other Appleby offices. Our unique global footprint enables us to provide a seamless cross-border service to our clients.
What advice would you give to the next generation of M&A lawyers?
When encountering issues on transactions be practical and commercial – clients generally only want to hear about an issue once you’ve found a suitable workaround solution. In addition, stay informed on the current trends in the market and keep on top with what the big players in the various sectors are doing (reading the Financial Times is useful).
What are your predictions for M&A in Jersey over the next five years?
Locally, we would expect the consolidation and restructuring of insurance and fiduciary businesses to remain busy during any Brexit transitional period.
If the current geopolitical climate trending towards protectionism and trade wars continues, we may see an increase in global restructuring as companies seek to minimise any tariffs imposed on their business and goods produced. Any such movement would undoubtedly have an impact on the M&A market in Jersey.
However, as Jersey is one of the leading offshore jurisdictions, we expect it to remain attractive to global public and private companies, financial institutions, funds and high net worth individuals.