Walkers BVI: hedgefund heyday

Date: 03 Nov 2006

Citywealth

Heidi de Vries who heads up Walkers in BVI, is originally from Australia where she studied law and commerce. She worked in Sydney and Western Australia before moving to England to Linklaters. In 2002 she made the island move and

switched to Walkers in Grand Cayman specializing in investment fund work. Then in July 2005 she heard some magic words “Would you like to be managing partner in the BVI?” Without a look back she made the move and now also heads their corporate department. Hats off to Walkers who also have Vicky Hazelden as Managing Partner at the Hong Kong office: both ladies were fresh off maternity leave. Heidi says “Walkers are a very forward thinking law firm.” She adds “There is still an element of sexism in the UK, certainly in the magic circle firms. Its a lot better than it was but not half as good as Walkers.”

Of the BVI Heidi says “its very different from Cayman which has become very sophisticated and quite Americanized – a bit like a mini Florida. BVI is still a pure Caribbean island with all the good and bad that goes with it.” She continues “its scenically beautiful, and

we have a good quality of life with sailing and diving on tap”. She finishes “its a wonderful place to live.”

On the work front, Heidi admits there are challenges but counters this saying “it is growing very rapidly, with more and more international recognition and a pro-active government behind us.”

The BVI have just launched “Team BVI” which is a mix of community, government and business who will be out lighting a fire under offshore work referrers.

On hedge funds Heidi says they are seeing an upswing of off shoring. Some recent figures released on mutual funds registered showed a 46% increase compared to first quarter last year. Heidi comments further “its also investment managers setting up on BVI mainly for cost saving reasons. “Monetary authorities elsewhere have increased fees for setting up to $3000 as opposed to $350 in the BVI.” She finishes.

Historically companies opening

up are holding companies, particularly from the Far East, like Hong, Kong, Japan and China and they have one million companies registered in the BVI. But there are also Russians, Europeans and US listed companies in the mix.

Heidi says many of these holding companies and now restructuring bringing a large number of deals to the BVI. She comments “The BVI companies act Jan 2005 has helped considerably. A notable deal for us this year was the Tommy Hilfiger merger acting for Apax.”

So is it all sunshine and sailing? Londoners regularly talk about dead end and more basic work offshore. I put the query in. Heidi reassures “work is not boring because we are in a rapid growth phase. My team share M&A, restructuring and listing work and a lot of funds, finance and opinion work.”

Deals worked on recently include large financing transactions where Walkers acted for large institutions

lending to support a mining project for gold and copper in Kazakhstan. Heidi has been busy setting up hedge funds primarily though – this is her expertise. (Eighty three set up in the BVI in the first quarter this year). Despite the global press attention on wavering hedge funds she hasn’t seen any signs of distress. She counteracts this by saying “In addition to hedge funds, private equity is really taking off in the BVI and Cayman had a blast of real estate funds which has now caught on here.”

With Heidi’s Australian roots, I wondered if that gravitated any Australian clients to her. She says “Yes, I’ve got quite a few Auz’ clients and act for a number of Australian financial institutions.” She further comments “A

number of my funds clients also have offices in Australia.”

Walkers set up over forty years ago as a Cayman based law firm. In those four decades the business has really turned around. When Heidi started with Walkers in 2002, it had just opened a London office. “Since then its gone ahead in leaps and bounds.” She muses. “We opened in BVI, Hong Kong, Dubai and just opened up in Jersey acquiring Crills which means we are now very much a global firm.” Heidi continues “We now have a global managing partner – Grant Stein and operate seamlessly. If we get contacted by a client who knows us and needs a quick turn around we send them to Hong Kong and the work is done by the next morning without us having to work night shift in BVI and vice versa.

As to her thoughts on how the offshore world will shape up? Heidi, says “growth will continue, the advantage of offshore entities will always be there. For holding companies, advantages are a very real requirement for most transactions.” She comments further “There will always be a need for offshore entities. There certainly is a race to open in offshore jurisdictions. Walkers are always looking at opportunities and no doubt will continue to open elsewhere.”

On the Ogier merger? Heidi believes this is was a smart move for WH Smiths and thought it was really only a matter of time before Ogier set up in BVI. She thinks it supports the fact that things are becoming more sophisticated in the island.

Of the BVI office, Heidi reminds us that Walkers acquired law firm Barkers in 2002 and then had four attorneys, three of which were partners. For the first three years she says they

tripled in size, after that, since Heidi has been there for the last sixteen months, the firm has doubled in size again. By 1 January 07 she says “we will have about fifty employees altogether.”

So where do all these lawyers come from when its notoriously difficult to recruit offshore? Heidi says “we tend to hire from Magic Circle firms in the UK because a requirement in the BVI is that you have to be admitted as a solicitor in the UK. We don’t like to poach from local firms and we don’t get other people taking staff either. We don’t really take on people from other firms with the exception of Chris McKenzie who is a trusts, wills and estates partner in the Walkers BVI office. ∆í√Ǭ¢ ¬°

Ingrid Pierce of Walkers in the Cayman is seeing a rise in hedge fund managers using unit trusts for structuring. Walkers say a recent survey by the Daiwa Institute of Research reported that almost two-thirds of Japanese pension funds are investing in hedge funds. According to analysts, Japanese investors have $USD 50billion in hedge fund assets. Walkers is seeing other trends in Japan including more complex fund structures and changes being requested to
unit trust structures to address the concerns of trustees.

Editor note:

Grant Stein, Walkers isfeatured on the Citywealth top 100 flagship list as a leading adviser.

BVI generally

“BVI is a sailing Mecca of the world from a tourist perspective. We have excellent sailing conditions all year around.

Our notable event is the BVI festival in first week of August each year: a traditional Caribbean carnival.”

www.bvitourism.com