Value of legal talent rising in funds industry
Counsels at alternative investment firms in Asia welcomed their recognition in the first list of top 100 Asia-Pacific in-house lawyers* recently published by law firm directory Legal 500. But one said that fund houses may need to raise the amount they pay such individuals if they are to attract the talent they need.
One-tenth of the Corporate Counsel 100: Asia Pacific comprised individuals from hedge fund and private equity firms (two from the former and eight from the latter), sitting alongside household names such as Australian telecoms provider Telstra and Philippine conglomerate San Miguel.
This is a disproportionately large representation for the alternative investment industry given its size relative to the wider economy in Asia, noted one counsel who made the list.
In addition, five legal counsels from other types of fund house and from institutional investors also appear in the line-up.
The aim of the project is to highlight individuals who are driving both legal and business issues to the forefront and to identify an array of the most influential and innovative in-house counsels working in Asia.
“I don’t know why it took so long for in-house counsels in Asia Pacific to be recognised,” said Joanne Low, general counsel at Hong Kong-based PE firm RJJ Capital, who was named on the list.
“It is probably indicative of the kind of deals coming out of Asia these days,” she added. “There are a lot more cross-border and high-profile deals [being done now], and maybe that’s why somebody decided to start looking at what is actually happening in this part of this world.”
Low cited as one such deal the plan by Chinese oil company Sinopec of 30% of its sales and marketing unit for Rmb107.1 billion ($17.5 billion) – as was reported in September.
Being recognised in this way reflects the ability of legal specialists in the industry to punch above their weight, said the counsel of a hedge fund manager in Hong Kong.
“If you are a general counsel of a huge company, you’ve got an army of lawyers,” he noted. “But the challenges faced by the alternative industry are different. You are still doing great things, but you’re trying to cope by doing more with less [resources].”
In Asia, hedge fund and private equity firms – especially home-grown ones – tend to be small, making the hiring of legal counsels a luxury that many cannot afford, as reported.
Yet legal and compliance expertise is becoming increasingly necessary and sought-after as regulatory demands on the investment industry have ratcheted up following the 2008 financial crisis.
Moreover, Asia is home to a myriad of regulatory regimes and countries at various stages of market development. As a result, counsels in the region can be said to play a more vital role than their counterparts in the more developed and unified markets of US and Europe, said the Asia counsel for a large US PE firm. This is a fact that Western-headquartered alternative firms may not recognise, said the lawyer.
But ultimately counsel is a support role, added the PE executive, so is likely to have less resources committed to it than, say, to a sales role, despite having wide-ranging responsibilities covering areas from internal risk management to vetting portfolio companies.
This is one reason it is hard for fund managers to find suitable experienced candidates to hire as counsels, suggested Low. Some say there is a shortage of such people in the market, but she argued that it is more down to the limited resources firms will commit to in-house legal teams.
It may be that lawyers would need to take a pay cut to move from a law firm to a fund house, said Low, since they may well be a partner or close to it with more than 10 years' experience. “It could be a difficult call to leave if you’re in practice.”
And this is a global theme. Extraterritorial legislation coming from Europe and the US, governing issues such as where and how funds can be marketed, means counsels have to play a greater role in navigating important business decisions, said Jiri Krol, London-based head of government and regulatory affairs and deputy CEO of the Alternative Investment Management Association (Aima).
“The onslaught of regulation means the person you turn to first when you have an issue is the legal counsel,” Krol told AsianInvestor. “The regulatory tsunami after the [2008 financial] crisis is among the key drivers for giving these roles a bit more prominence everywhere.”
* Below are the counsels at fund managers and institutional investors who made the Corporate Counsels 100 list for Asia Pacific:
Hedge funds
Jason Eng, general counsel and chief compliance officer at Dymon Asia
Lee Kher Sheng, general counsel at Azentus
Private equity
Wayne Bannon, Asia general counsel at Carlyle Group
Gary Chaucer managing director at Hony Capital
William Hay, general counsel at Baring Private Equity Asia
John Lee, general counsel at Macquarie Infrastructure and Real Assets
Joanne Low, general counsel at RRJ Capital
Rik Muilwijk, general counsel at Navis Capital Partners Singapore
Amy Ng, Asia-Pacific general counsel at CBRE Global Investors
Melissa Obegi, Asia general counsel at Bain Capital
Other fund houses
Marnie Prater, regional director for legal and compliance at LaSalle Investment Management
Ross Long, chief legal officer at Nikko Asset Management
Edmond Courtroul at Galileo Japan TT
Institutional investors
Pek Siok Lan, general counsel at Temasek
Xiu Chongmiao, legal principal at China Life Insurance