You are celebrating 25 years in Asia this year. How do you think the legal market has changed in that quarter century?
Immergut: In the last 25 years we've seen great cyclicality. We have seen ups in some parts of the region and downs in other parts. But the changes that have taken place in our practice have really been accentuated in the last two or three years. We have seen the type of work that we do change dramatically.
Right now the two major practices we are most active in are private equity and non-performing loans. That is totally different from the situation two or three years ago. Private equity has always been an important part of our practice here, but not with the same sense of emphasis we have now.
If you look five years ago, we were mainly doing capital markets work. We are obviously doing a lot less capital markets work now, although we have gotten our share of deals. On the project finance side, we have nothing in the way of greenfield project finance transactions, although we have a number of major restructurings and M&A deals, which are keeping our project finance lawyers busy. In one sense, there has not really been that much change in Asia as the only really consistent thing that has happened has been change itself.
You mention the growing importance of private equity, NPLs and workouts for your practice over the last few years. Has there been a radical shift in the financing landscape in Asia?
The main change we have seen recently has been the lack of activity in the capital markets and corporate finance sector. That work has fallen off a cliff, although we have kept our share of deals. It is a reflection of the markets. But our acquisition finance, aircraft finance and project re-financing practices remain busy.
What has been the highlight of your practice here over the past year or so?
We have had a few very exciting transactions. The closing of the US$8 billion Lehman/Woori distressed debt and investment deal in Korea was something that was particularly significant. It was one of the most visible deals in Korea and clearly one of the most important deals that Lehman has done in Asia.
Two other very visible deals we have done were Olympus Capital's US$300 million purchase of Arysta Life Sciences in Japan and Farallon's US$500 million purchase of Bank Central Asia in Indonesia. In a market like Japan you have had all the major private equity players come in, but very few of them have actually closed any transactions. In Indonesia where few deals are done at all, to be involved in two of the largest and most visible deals in Asia this year was a real accomplishment.
In a very short time frame., we also did the two Petronas debt deals representing the underwriters the first one was the largest corporate debt offering ever in Asia. We have now worked on seven out of the ten largest corporate debt offerings in Asia as well as the largest IPO in history (the $18 billion DoCoMo offering).
Why do you think Milbank Tweed has made such a success of your Asian practice, while so many other US firms have not?
Right from the beginning here we have concentrated on four things. First of all we have limited our practice to higher end, complex, non-commodity transactions. Second, we deliver extremely high quality substantive legal advice. Third, we emphasize an absolute commitment to client service. Fourth, we have developed a diversified practice both geographically and in practice areas, which permits us to remain busy despite changing business, country and product cycles.
So there is no temptation to follow the lead of some other firms and build up a local practice and get some of the more annuity type business?
We practice US law and UK law and we will be practicing German law. In Asia, our philosophy has been to team up with the best local law firms in the various jurisdictions in which we operate on a repeated basis. We feel that if we hired local lawyers in all the countries that we practice, we might not end up with the best in each jurisdiction. Our clients generally prefer this arrangement.
Many US firms are in Asia to follow their clients. Is that what you have done here or have you developed a distinct practice?
It's a mix. Twenty-five years ago, we came to Asia at the request of our lead client, Chase Manhattan Bank. Now JP Morgan Chase, the bank is still a lead client both in Asia and worldwide. But in other respects we really do have an independent practice in Asia. Over the past two decades, we have developed many local corporate relationships throughout Asia, as well as banking clients that are not as major elsewhere in the firm, such as Morgan Stanley. We have also combined successful relationships in Asia with relationships with other non-US offices, such as Goldman Sachs' private equity group which we work with closely in both Asia and London.