International financial centre law firms are positioning themselves to take advantage of new emerging markets in Asia and South America. The Journal spoke with Diarmad Murray, global managing partner at Walkers about the effect this has on the firm’s business in the Cayman Islands.
Walkers has been one of the early multijurisdictional offshore law firms. What is Cayman’s role within the global network of offices? How is this role changing?
Diarmad Murray: Cayman remains Walkers’ largest office and is the location of our senior management, however the distribution of work around our network has changed over the past five years.
More recently we have seen a far higher percentage of work going through our offices in Asia and Europe, however Cayman is still a vital office for Walkers’ growth and will continue to be.
In which parts of its business is Walkers growing particularly?
DM: Our Irish business has grown tremendously over the past year, in particular on the asset finance side, capital markets and UCITS investment funds, as well as Insurance Linked Securities, which we formed a specialist group for in 2011 with attorneys based in both Cayman and Dublin.
Globally we have seen strong growth in our corporate and M&A practices, notably IPO work in Asia. Our insolvency and corporate recovery group has expanded significantly, with greater headcount in Hong Kong and we are devoting a great deal of attention to the emerging markets.
What are the emerging markets for your firm?
DM: Walkers has allocated significant resources, including dedicated specialist teams to service our growing client base in the traditional emerging markets of China, Brazil, Central and Eastern Europe and India for some years and these markets in many cases would no longer be termed as emerging.
In an offshore context, markets such as the wider Latin American region are evolving in terms of the services required from providers such as ourselves. In the past 12 months we have seen considerable interest from clients in new emerging markets such as Mongolia, Indonesia, Malaysia and Africa.
Is your business in Cayman growing and how does Cayman compare to the growth of financial centres in Asia and South America?
DM: From our perspective, Cayman is regaining the levels of activity that were seen two or three years ago.
The strong growth we are seeing in markets such as Asia and Latin America will likely result in greater demand for securitisation and structured products work and as such. Cayman is well positioned to take advantage of that growth.
What are the main challenges for your business?
DM: In terms of the challenges faced by our clients, I would say that the complexity of the recent wave of international regulatory changes has proved a significant obstacle, while in the investment funds business the investor capital raising outlook remains challenging.
What are your expectations for Walkers’ business in 2012 and how does this compare to 2011?
DM: While we hope to see a continuation of the recovery in financial markets in 2012, Walkers will continue to grow its business in new frontier markets such as Indonesia, Mongolia and Africa, as well as in sectors that are recovering quickly from the global financial crisis.
In this regard our substantial and growing corporate/M&A expertise will be valuable, as well as other areas such as structured finance. e aim to continue to maintain and grow our relationships with our most important clients who have also seen difficult times during the downturn.
At the start of 2011 the outlook for investment funds was less certain and while that market has picked up, it now remains to be seen how the European currency and debt crisis will play out.
Although each year brings fresh challenges, Walkers remains committed to being a premier provider of international legal and management services and being present in the markets that our clients want us to be and when they need us.