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MARCH 2013

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Editor’s NoteHello and welcome to the March 2013 edition of Finance Monthly. Sinceour last issue the news has been awash, as ever, with intrigue, outrage andscandal.

The story that has caught my attention the most this month is the turmoil faced by the government andpeople of Cyprus amidst their heavily sought bailout for their flagging economy.

Desperate times, it seemed, called for desperate measures, in the form of what was labelled a tax levy byEurozone finance ministers who demanded, initially, that Cypriots pay up to 10% of their bank deposits inexchange for a €10bn bailout; a move which led to a mass panic and had people draining ATM’s in adesperate attempt to protect their savings. Reports subsequently flowed in from the targeted Cypriotpeople who alleged that their banks had denied them any such cash withdrawal privilege or transfer offunds. In addition, the island unprecedentedly extended its bank holiday in what, from the outside lookingin, appeared to be a technique akin to burying ones head in the sand. Cyprus later amended the termsof the controversial savings levy, under which is proposed that savers with less than €20,000 in their bankaccounts would not see their deposits exploited. Nevertheless, the term “electronic mugging”, which Iheard being thrown around, seems apt at this stage.

Despite accounting for only 0.2% of the combined output of all 17 EU countries in the Eurozone, the troublesfacing the Eastern Mediterranean Island seem to have created a spreading concern that the Eurozonecould be in for an additional wave of hardship and financial crisis. Earlier this month, world stocks fell amidstCyprus’ developing drama; in Europe, the FTSE 100 index of leading British shares was down 1%cent at6,423 and Germany’s DAX fell 1.2% to 7,944 whilst the CAC-40 in France was 1.3% lower at 7,945.

Speaking of the stock market, this month’s issue features a special feature interview with ActivTrades CEO,Alex Pusco, who explores the recent developments within the global equity markets and advises howinvestors can maximise their trading potential.

We also get a valuable perspective on David Cameron’s proposed European Union “in or out” referendumfor the UK from IBOS General Secretary, Bob Lyddon who examines the impacts this pledge will havebetween now and 2017.

In addition, as this month played host to International Women’s Day on March 08, we bring you a Spotlighton Women in Finance with Broadstone’s Alison Seymour who details her lengthy career in the sector andher perspective on gender equality in the workplace.

This month’s issue offers a host of interesting features and exclusive interviews along with the news, funds,and M&A reports we bring you each month. I hope you enjoy the March 2013 Edition of Finance Monthly.All the best,

Mark PalmerExecut i ve Editor

Contents

4 Editor’s Note

10 NewsInternational, European and USA News13. Charles Schwab US Market Report

45 FundsLatest information on funds and investments

54 Transaction Reporting The latest corporate transactions from around the world

14 Special Features14. The Stock Market

16. EU Referendum

18. Private Equity

24 The Interview26. Karmijn Kapitaal

28 Spotlight On...30. Business Aviation

31. Aircraft Registration

32. Debt Recovery

34. Fund Administration

35. Investment Funds

38. Insolvency & Restructuring

40. Real Estates & Infrastructure

41. Transfer Pricing During Economic Crises

42. Trusts & Property

43. Women in Finance

49 Advisor of the Month

21 Deal of the Month22. Naylor Industries Buyout

50. Dakhlaoui Avocats

52. Azmi & Associates

News International


UAE Top Performing Country Constituent YTD in Russell EmergingMarkets IndexThe Russell EmergingMarkets Index has returned3.1% year-to-date as of March11th. However, within theIndex, certain countryconstituents have significantlyoutperformed this level ofreturn with United ArabEmirates taking the lead andreturning 23.2% YTD.

Country constituents UnitedArab Emirates (UAE), thePhilippines and Thailandhave led the index in 2013.UAE has led the index YTD asof March 11th, returning

23.2%, while returning31.3% for the last year. ThePhilippines has returned20.2% YTD as of March 11th,while returning 49.4% for thelast year. And Thailand hasreturned 17.5% YTD as ofMarch 11th, while returning43.2% for the last year.

Country constituents Egypt,Morocco and Peru have beenat the bottom of the index interms of YTD performance.Egypt has returned (-6.1%)YTD as of March 11th, whilereturning (-5.4%) for the last

year. Morocco has returned(-5.2%) YTD as of March 11th,while returning (-19.0%) forthe last year. And Peru hasreturned (-3.9%) YTD as ofMarch 11th, while returning(-2.4%) for the last year.

"The wide variation ofperformance within emergingequity markets since thebeginning of the year asdemonstrated through theRussell Indexes returns helpsillustrate the diverse natureof investment opportunitiesand risks across less mature

equity markets," said ScottCrawshaw, emerging marketsportfolio manager for RussellInvestments.

"Although emerging marketson average have under-performed relative todeveloped markets in the U.S.and Europe this year, asdemonstrated by RussellEmerging Markets Indexreturns relative to returns ofthe Russell 1000(R) Index,Russell 2000(R) Index andRussell Developed EuropeIndex, due in part to various

factors such as the potentialimpact of a weaker Yen onemerging Asian countryexports, it is important toremember the important rolethese markets can play withina multi-asset portfolio from adiversification and returnperspective. And when youare seeking exposure toemerging markets, it isimportant to work with anactive manager with theinsight to help you evaluatethese opportunities andput them into a broadermulti-asset context."

Q4 2012 Sees Healthy Boost for M&AActivity in Offshore MarketsThe offshore marketsexperienced their largestquarter-to-quarter rise inM&A transactions in the lastthree years, according to areport released by Appleby.The latest edition ofOffshore-i, the firm’squarterly report whichprovides data and insighton merger and acquisitionactivity in major offshorefinancial centres, focuses onQ4 2012 while providing areview of the year as a wholeand predictions for 2013.

Both the volume and valueof deals involving offshoretargets increased considerablyin Q4 as against thepreceding three months, withvolume up 27% and value up202%. While the substantialincrease in value is largelyattributable to the biggesttransaction of the quarter -the USD56bn sale of BritishVirgin Islands-listed oilexploration business TNK-BPto Russian state-owned oilcompany Rosneft – it isencouraging to see that ifthis deal is excluded fromthe data, the quarter stillboasts a deal value ofUSD45.8bn, placing it as thethird highest three-monthperiod of the last three years.Nevertheless, despite thesurge in activity for the lastquarter, 2012 overall had 14%

fewer deals than 2011, and26% fewer than 2010.

Global Head of Appleby’sCorporate & Commercialdepartment, CameronAdderley commented, “Whilewe remain positive aboutactivity levels going forward,there is no escaping the factthat 2012 was anotherchallenging year for M&A inour markets…2012 waspeppered with uncertainty,most notably aroundthe Euro crisis, the USpresidential election, andchanges of leadership inChina and elsewhere. Movinginto 2013, the outlook is farfrom clear and the very realquestions remain around thesingle European America’schallenges related to the socalled Fiscal Cliff and China’scontinuing growth.”

CEO’s Confident That ASEANEconomic Community WillCreate Growth OpportunitiesResearch by the EconomistCorporate Network (ECN) andsponsored by Baker &McKenzie suggests that globalcompanies are optimisticabout the opportunitiesthat the ASEAN EconomicCommunity will bring.

“Riding the ASEAN Elephant:How business is respondingto an unusual animal”summarises the results of apoll of senior executives from147 multinational companiesoperating in the ASEANregion about their companies'strategies in the region. 95%of respondents believe thatASEAN will achieve its visionof creating an economiccommunity with a freemovement of goods, serviceand labour, and the majorityare factoring ASEANintegration into their strategicplanning. Receiving seven-times the amount of foreign

direct investment per capitathan India in 2012, and almostas much as China, the ASEANregion is a quiet achiever onthe world economic stage.

The ten member-states ofthe Association of South EastAsian Nations - Brunei,Cambodia, Indonesia, Laos,Malaysia, Myanmar, thePhilippines, Singapore,Thailand and Vietnam - aim tocreate an ASEAN EconomicCommunity by 2015. Theenormous project ofharmonising laws acrossthe region has begun, andcompanies from acrossthe globe are attracted byimpressive rates of economicgrowth in the region andexpanding consumerspending.

A full copy of the report isavailable online.

Brazil’s Economic Growth in Slowdown 2012 saw Brazil’s economygrow at the slowest rate inthree years.

According to the BrazilianInstitute of Geography andStatistics (IBGE), GDPexpanded by 0.9%, reachedR$ 4.403 trillion.

The IBGE reported in astatement that ‘in relation tothe third quarter of 2012, theGDP of the fourth quarterposted a positive change of0.6%, in the seasonally

adjusted series. Among theeconomic activities, servicesare a highlight, growing 1.1%.The industry had a positivechange of 0.6%, in theseasonally adjusted series.Among the economicactivities, services are ahighlight, growing 1.1%. Theindustry had a positivechange of 0.4%, whereasagriculture and livestockfarming recorded a drop(-5.2%)’.

This will more than likely

come as a blow to thecountry’s president, DilmaRousseff, who said at thebeginning of her presidentialterm in January 2011 that shewould aim for a growth of4.5% to 5% in coming years.Since then, the rate hassteadily declined.

However, it is hoped thatevents such as the World Cupin 2014 and the Olympics in2016 will give Brazil the boostit needs to get growth movingagain.

News Europe

Sky to Acquire Telefónica UK’s Broadband andFixed-Line Telephony BusinessEarlier this month, British SkyBroadcasting Group plc (Sky)announced that it has reachedan agreement with TelefónicaUK for the proposedacquisition of its O2 and BEconsumer broadband andfixed-line telephony business.The transaction will make Skythe second-largest provider inthe UK broadband market,building on its existingposition as the UK’s fastest-growing broadband andtelephony business.

Telefónica UK’s consumerbroadband and fixed-linetelephony customers, of whichthere are currently over half amillion, will become Skycustomers for those services oncompletion. By creating theUK’s second-largest homebroadband provider, theacquisition will deliver furtheradvantages of scale for Sky’shome communicationsbusiness.Jeremy Darroch, Sky’s ChiefExecutive, said: “Sky hasbeen the UK’s fastest-growing broadband andtelephony provider since weentered the market six yearsago. From a standing start in2006, we have added morethan 4.2 million broadbandcustomers. The acquisition ofTelefónica UK’s consumerbroadband and fixed-line

telephony business will help usaccelerate this growth.

“We believe that the O2 andBE consumer broadband andtelephony business is a greatfit, with customers used tohigh-quality products andstrong levels of customerservice. We look forward towelcoming these newcustomers to Sky and givingthem access to our wide rangeof high-quality products, greatvalue and industry-leadingcustomer service.” This acquisition is the latestmove by Sky to take advantageof the growth opportunity inhome communications. Sky

Retail Brands Need Innovative Ways to EnticeCustomers to Buy, says SynqeraAs the World Economic Forumwarns that the Eurozone crisiscould yet reignite, it is vitalthat retailers explore creativeand innovative strategies inorder to remain competitive,advises global tech start-upSynqera. Although recentfigures state that Eurozoneretail sales rose slightly inNovember last year, forecastershave warned that the continentis by no means out of thewoods.

A number of retailers arealready bearing the brunt oftightening consumer wallets inEurope with brands such asVirgin Megastore in Franceand entertainment store FNACannouncing store closures.Many put the failure of theseretailers down to their lack ofinnovation and slowness inembracing technology that canenhance customer loyalty.Brands that look towards thefuture and think creatively

about the customer experiencethey offer are the ones thatare thriving regardless of theeconomic climate.

‘Bricks and mortar’ retailershave the fortunate opportunitythat online brands do not havein that they can reach outto their customers throughin-store marketing, targetingthem with offers to encouragethem to buy more. Crucially,the minimum 40-secondcustomer idle time spent at thecheckout provides a fantasticopportunity to engage with theshopper.

Synqera’s pioneering solutioncan be placed throughout astore, and whether at theentrance or at the till withan additional function as acontactless payment terminalcan intuitively gather real-timedata on customers which canbe tailored into bespoke dealsand incentives for them to

enjoy whilst shopping. Kirill Gorynya, CEO ofSynqera, comments: “This yearwill no doubt be anotherchallenging year for Europeanretailers, and the onessurviving and thriving willbe those that are not afraid toexplore new technologies.Retailers with bricks andmortar stores actually have anenviable opportunity forengaging customers whilstthey are in the outlet andwilling and prepared to spendmoney. By employing asolution such as Synqera,retailers can make thecustomer experience moreenjoyable and therefore morelikely to create engagement,loyalty and crucially, sales. Ipredict this year retail willbecome more cut-throat, butin turn, will evolve into a sectorwhere those thinking towardsthe future will prosper.”

Eurozone Business ConfidenceRises to One-Year High According to leading, globalfinancial information servicescompany, Markit, expectationsregarding business activity overthe next 12 months havestrengthened across the Eurozonecompared with the previoussurvey conducted in October2012. Increased activity is forecastby +24 percent of companies onbalance, up from just +8percent last autumn and thehighest reading for a year.

Confidence is highest in themanufacturing sector, where thenet balance of companiesanticipating growth of businessactivity has increased to +30percent from just +5 percent inthe autumn. In the service sector,the net balance is +21 percent, upfrom +9 percent.

Jack Kennedy, Senior Economistat Markit commented: “Theimprovement in businessconfidence across the Eurozone inFebruary is further evidence thatthe region’s downturn bottomedout in the fourth quarter of 2012,when the outlook was the darkestsince the 2008-9 recession, andthat the economic climate hasthawed in early 2013. The surveyadds to expectations that the

region’s economy will stabilise

by the mid-year and growth

will return in the second half of

2013…”

“Optimism is the highest in

Germany, but perhaps most

encouraging is the marked

improvement in confidence in

Italy, Spain and, to a lesser degree,

France since the post-crisis lows

seen late last year. A robust

German upturn therefore looks

likely to be accompanied by

gradual turnarounds in the

peripheral economies, though

Greece still looks set to endure

another year of recession…”

“Company profits expectations

have turned moderately positive

for the first time in a year, but this

has not translated into upward

revisions to capital expenditure

plans, as caution remains the

watchword in a still fragile and

uncertain economic environment

for many companies.”

The full “Markit Global Business

Outlook Survey: Eurozone” can be

found online at www.markit.com

Personal Finance Society hitsMilestoneThe Personal Finance Society(PFS) has revealed that for thefirst time the number ofChartered financial plannershas exceeded the 3,500 mark(3,505 as at 28 February2013), indicating anencouraging start to the yearfor the Chartered financialplanning profession. With justover 34,000 members, thisalso means that over 10% ofPFS members now hold theChartered title.

The number of Charteredfinancial planners has risenfrom 2,832 this time last yearand almost quadrupled sinceFebruary 2007 when therewere just 905 Charteredfinancial planners. TheChartered financial plannertitle for individuals waslaunched in 2005.

There are equally positivesigns for the corporateChartered financial plannertitle, with the number ofChartered financial planningfirms in the UK currentlystanding at 498 (as at 28February 2013). Charteredfinancial planning status, both

individual and corporate, isgranted by the CharteredInsurance Institute (CII),of which the PFS is themembership body dedicated tothose working within thefinancial planning profession.

Commenting on theachievement, Fay Goddard,outgoing CEO of the PFS, said:“Our mission at the PFS hasalways been, and continues tobe, to lead the financialplanning sector towards higherlevels of professionalism;therefore I am thrilled we havereached this significantmilestone.

“It is a testament to the hardwork of the PFS’ Charteredmembers that the Charteredfinancial planning titleremains stronger than ever,especially considering thereforms that have taken placein the financial planningprofession over the last fewyears. I am looking forwardto see the PFS Charteredmembership continue to gofrom strength to strength inthe years ahead.”

has added 382,000 customers(at 31 December 2012) forstandalone homecommunications since theintroduction of the service in2010. In addition, Skylaunched broadband andtelephony products in theRepublic of Ireland in February2013 to further supportorganic growth.

The acquisition, due tocomplete by the end of April2013 (subject to regulatoryclearance), will be funded fromexisting cash reserves and isexpected to be accretive toearnings per share in thesecond full year of ownership.

News USA


US Trade Deficit ExpandsThe U.S. Census Bureau and

the U.S. Bureau of Economic

Analysis, through the

Department of Commerce,

have announced that total

January exports of $184.5

billion and imports of $228.9

billion resulted in a goods

and services deficit of

$44.4 billion, up from $38.1

billion in December, revised.

January exports were $2.2

billion less than December

exports of $186.6 billion.

January imports were $4.1

billion more than December

imports of $224.8 billion.

In January, the goods deficit

increased $5.7 billion from

December to $61.8 billion,

and the services surplus

decreased $0.6 billion from

December to $17.3 billion.

Exports of goods decreased

$2.0 billion to $130.8 billion,

and imports of goods

increased $3.6 billion to

$192.5 billion. Exports of

services decreased $0.1

billion to $53.7 billion, and

imports of services increased

$0.5 billion to $36.4 billion.

The goods and services deficit

decreased $7.8 billion from

January 2012 to January

2013. Exports were up $5.8

billion, or 3.3 percent, and

imports were down $2.0

billion, or 0.9 percent.

Insider Trading Costs SAC Capital $614mHedge Fund SAC Capital, led

by billionaire Steven Cohen,

has agreed to pay a record

$614m to US regulators to

settle charges of insider

trading.

The hefty settlement figure

was agreed in response to two

separate incidents at SAC

Capital.

CR Intrinsic Investors settled

for $600m, the largest

settlement figure ever in

an insider-trading case,

following the prosecution of

former SAC trader Mathew

Martoma last year who

alleged to have traded in the

drug stocks Elan and Wyeth

based on secret information

from a doctor involved in

clinical trials for an

Alzheimer's drug. Mathew

Martoma is still facing a

criminal trial and has pleaded

not guilty to the allegations.

The additional $14m of

the total fine comes from a

separate incident at the

Sigma Capital affiliate for

insider trading in the shares

of tech firms Dell and Nvidia.

In a statement, following

the settlement, a SAC

spokesperson commented:

“This settlement is a

substantial step toward

resolving all outstanding

regulatory matters and allows

the firm to move forward

with confidence,…We are

committed to continuing

to maintain a first-rate

compliance effort woven into

the fabric of the firm."

Are Stock Markets on the up?Global stock markets started

showing signs of recovery this

month after New York’s Dow

Jones share index hit a record

high on March 5th.

Reaching 14.285, the Dow

broke its former record of

14,198 which was set in

October 2007 before the

financial crisis. These existing

figures suggest that investor

confidence is growing and

gives fresh optimism for the

US markets around the world

for a full economic recovery.

“The current rally in the stock

market is likely to indicate a

renewed appetite for risk

trading, marking a change in

the mood we had been

carrying since 2008.” says

Alex Pusco, CEO of

ActiveTrades Plc, in this

months special feature on

Global Stocks, “…There is

growing trust in the equities

markets, with increasing

numbers shying away from

other forms of investment

(government bodies for

example) and embracing

shares. Over the next year

we will hopefully see this

continue as countries

currently in the recession

begin to crawl out of it

slowly” (More on page 16)

Positive Signs for USFactory OutputManufacturing in the US saw

a healthy boost in February

led by an increasing demand

in automotive production.

According to the Federal

Reserve, Factory production

rose a seasonally adjusted

0.8% in February from the

previous month, after falling

0.3% in January; factory

output in February was 2.0

percent above its level of a

year earlier. Capacity utiliza-

tion for manufacturing

moved up 0.5 percentage

point in February to 78.3

percent, a rate 0.5 percentage

point below its long-run

average.

The production of durable

goods moved up 1.2 percent

in February, with increases

recorded in most major

categories of durables. The

only decline among major

industries was in the output

of primary metals, which fell

2.6 percent. The largest rise

was in the output of motor

vehicles and parts, which

climbed 3.6 percent after

having fallen 4.9 percent in

January. In February, gains

of between 1.6 percent and

2.0 percent were recorded

in the indexes for wood

products, non-metallic

mineral products, fabricated

metal products, machinery,

and furniture and related

products. Capacity utilization

for durable goods

manufacturing increased 0.8

percentage point to 78.7

percent, a rate 1.6 percentage

points above its long-run

average.

Charles Schwab

CHARLES SCHWABon the US Market

However, we do err on the

side of caution as a pullback

at any time should be

expected, but we do remain

optimistic about stocks. We

also believe that the attention

garnered by the improvement

of the stock market could

bring investors who have

been sitting on the side-lines

back into the market, fuelling

a further move higher. But

there remains ample

side-lined money waiting for

the elusive pullback; and that

often means that it is less

likely. Sentiment measures

are slightly mixed — with

some showing extreme

optimism, while others

have shown more subdued

optimism. As mentioned in

the past we do believe that

picking tops and bottoms is

generally a losing strategy.

The housing sector in the

US continues to improve,

with housing stats moving

higher and inventories at

near-record lows relative to

the working population. With

this improvement, we do

expect inventory to start

rising as sideline sitters

spring into action, but

we continue to believe the

improvement is sustainable.

Housing is set to contribute

to both job and economic

growth this year: several

economists we follow have

housing-related job growth

this year of 700,000-

800,000 and a one percentage

point contribution to gross

domestic product (GDP).

The US labour market

continues to heal, with the

four-week moving average of

initial jobless claims dipping

to the lowest level since 2008

and ADP reporting private

payrolls increased by

198,000, while January's

number was revised higher to

a gain of 215,000. Finally, the

broader report from the

Bureau of Labour Statistics

showed stronger-than-

expected gains as 236,000

jobs were added, with the

unemployment rate dropping

to 7.7%, the lowest since

December 2008.

However, these economic

improvements are not

enough for the Fed to ease

off the accelerator as they

continue to purchase $85

billion in Treasuries and

mortgage-backed securities

on a monthly basis. While

they seem to have no plans

to end purchases in the

foreseeable future, some

members have started to

question the costs of

continuing this program. We

are also concerned about the

unwinding process that

will ultimately occur and the

resulting impact those

actions will have on financial

institutions, markets of

all kind, and the overall

US economy. With

unprecedented action by

the Fed, there's no history to

lean on regarding how to

"normalise" monetary policy

from these levels. As such, we

believe risks will rise as the

Fed moves closer to tapping

the brakes, and that this will

be a growing issue for market

participants to pay attention

to as the economic expansion

moves forward.

Thus, we are not certain on

what will happen with stocks

over the next few weeks,

but we do believe that the

environment can foster

further gains in the US as

economic data remains

positive. The Fed maintains

its accommodative stance,

and small progress is being

made in the fiscal realm.

Investors concerned about a

pullback may want to hedge

their portfolios, but maintain

adequate exposure to

equities. We advise to keep a

long-term view in mind.

Kully Samra,

UK Branch Director,

Charles Schwab

The US economy has recently been in the headlines with the Dow hitting a new record as stocks

continue to move higher. New record highs have been recorded and the market is now back to

a level that preceded the Great Recession and financial crisis. Fund flows have also picked

up, however many investors remain waiting for an elusive pullback. General economic views are

positive and above expectations, with economic data indicating decent economic growth for

the US.

The housing sector in the

US continues to improve,

with housing stats moving

higher and inventories at

near-record lows relative to

the working population.

Special Feature


Since the start of the year, certain global stocks have begun to

supersede their recurrent highs which, together with bouts of

improving economic data, have subsequently renewed more positive

attitudes towards trading following what has largely been a depressed

stretch for equity markets. Alex Pusco, CEO of ActivTrades Plc, an

online brokerage and system trading company spoke to Finance

Monthly about some of these recent boosts and ways in which

investors can maximize their trading potential in 2013.

Attitudes towards the global economy

and financial issues in general have

been rather deflated and unenthusiastic in

recent times; how far has this spread into the

stock market and what major trends have

appeared over the past couple of years?

It is very true, over the last few years the industry

has been marked by a generally gloomy feeling.

Nevertheless, we have recently noted a marked

recovery in the equities markets. In March, we saw

two big wins for the financial sector, the Dow Jones,

for example, reached an all-time high and the FTSE

100 index closed at the highest levels since 2008.

This shows that the markets are slowly becoming

stronger again. Political situations internationally

such as; the Italian election, play a large role in how

the currencies fluctuate.

ighs&Observing The Stock Market HAlex Pusco, CEO of ActiveTrades Plc.

Alex Pusco

Q

Lows:

The Stock Market

There are also growing trends in the sector. The

most popular at the moment is ‘Social Trading’,

where traders can follow an expert trader replicating

their every move. They loose, you lose, they win, you

win. It is a great way for new traders to gain a deeper

understanding of the markets as well as interact with

multi-leveled experts. A couple of years ago trading

was a private affair, with tips and advice rarely being

shared. Now we are seeing an influx of users on

social networking sites such as Twitter and Facebook

discussing the best moves to make and platforms

being developed for those who are constantly on the

move through apps and mobile technology.

Late last month there were reports of

global stocks defying cyclical highs and

edging upwards; is this a positive sign for the

future or simply a market anomaly?

The current rally in the stock market is likely to

indicate a renewed appetite for risk trading, marking

a change in the mood we had been carrying since

2008. As mentioned earlier there is growing trust in

the equities markets, with increasing numbers

shying away from other forms of investment

(government bodies for example) and embracing

shares. Over the next year we will hopefully see this

continue as countries currently in the recession

begin to crawl out of it slowly.

Do you have predictions for the market

for the remainder of 2013?

No predictions as of yet but we are pleased to see a

strong rise in the volumes traded so far this is year.

In our view this means that more people are feeling

positive about the markets. This of course will

happen slowly because everyone is still wary but it

shows that with time faith can be restored. I think

that by the end of this year it will be clear which

direction the global economy will go.

What advice can you give to investors

for maximising trading potential?

I would advise them to avoid losing control over

their emotions. Don’t let fear or greed take over,

stick to the plan! I think it’s easy for traders to get

ahead of themselves after they realise they have been

doing well for a bit, instead of sticking to their plan,

which might be to stop after a certain number of

pips, they continue trading hoping for a larger gain.

This is when greed takes over and people can lose a

great deal. Whenever anyone asks me what I would

do if I was trading, I’d make a plan and stick to it,

that way your investment stays protected.

What do you think is the best way to

educate new traders?

Over the last five years the industry has changed

quite dramatically. Around 100,000 of people in the

UK currently use their disposable income to trade -

whether that is first thing in the morning before

heading to work, on their lunch break, or after they

have come home from a long day in the office. That’s

a large number of people who are involved in the

industry, a lot of them trade on the go – on their

smartphones, or tablets. We have renowned trading

specialists, Malte Kaub and Paul Wallace, talking

at an event on how snap decisions can lead to

consistency in trading, in a bid to help new

traders understand the industry better. For more

information and to find out how to book your

tickets visit:

www.activtrades.co.uk/index.aspx?page=education_events

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Special Feature


UK Prime Minister, David Cameron has declared that the British people must have their say on

the country’s place in the EU and has pledged an in/out referendum if the Conservative Party

wins the next general election, a pledge that is already having a ripple effect domestically

and throughout Europe. Here, Bob Lyddon, General Secretary of the IBOS Association - the

international banking network - dissects Cameron’s motives and looks ahead to determine the

various impacts the proposed referendum will have on the UK/EU economies.

IN OROUT?

Cameron – Man of Destiny & Legend in His

Own Country Supper Time

David Cameron has signalled his determination to

proceed with an In/Out referendum on the UK’s

membership of the EU. It is a political manoeuvre,

and seems a risky one on the surface, because it

ushers in several phases of uncertainty that could

have negative economic drag. However, an

examination of the phases - and how the key

stakeholders may react in each one – shows that all

the risks for Cameron are in 2013-14, and are about

delivering slightly better economic data than the rest

of the EU up to 2014, and seeing off Scottish

independence. These are two good bets, as long as

the rest of the EU can be relied upon to deliver a

sluggish economic performance.

Political Manoeuvres

The key economic stakeholders are UK business, EU

business, and inward investors looking at Europe.

Cameron’s big risk is that they will invest much more

in the rest of the EU in 2013-2017 than in the UK.

Taking that risk is the price to be paid for the

political benefits of signalling a referendum only

after the next General Election (due in 2015), and

there are good grounds to believe that the risk will

not materialise.

Cameron books an immediate and substantial

premium for taking on the risk:

• It defuses pressure from the Tory right wing and

the tabloid press

• Fends off attacks from those who still ask why the

“cast-iron guarantee” of a referendum on the

Lisbon Treaty was dropped when he became PM

• Draws the teeth of the UK Independence Party

under a strapline of “why support them when you

will get what you want by voting Tory?”

• And the subtext is “if you vote UKIP then the

Tories will lose, and you will have either Labour

or Labour/LibDem, both of whom are committed

against a referendum”

• Characterises Labour and LibDem as both being

unconditionally pro-EU

• Sets Europe as being the “clear blue water” issue

in the 2015 General Election campaign

That’s the good bit. Cameron has no direct

answer to the simple question: “if it is an In/Out

referendum, why can’t we vote now?” The real

answer is that the referendum issue is very useful to

him: he can make it the donkey pulling the cart of

his re-election campaign. The referendum timing –

after the election – is thus obligatory and must be

justified on the thin grounds that there is no time

prior to 2015 to negotiate the New Deal between the

UK and the EU that the referendum will adjudicate.

Were Cameron interested in an EU exit he would not

bother with any New Deal.

Phases Between Now & 2017

A. Now to 2014 – The referendum on Scottish

independence means there could be no UK in its

current form as a negotiating partner for the EU to

deal with by 2015-17

B. 2014 – 2015 – Run up to the General Election

latest May 2015

The Impact of the Proposed UK-EU Membership Referendumon the UK & EU Economies Between Now & 2017

EU Referendum

Bob Lyddon, General Secretary of the IBOS

Association - the international banking

network.

IBOS stands for International Banking - One

Solution. It is an association which fosters

inter-bank cooperation. Currently active in 27

countries and rapidly expanding, its members

include Santander, HSBC France, Intesa SanPaolo,

KBC, Nordea and UniCredit Bank.

C. 2015-2016 – Negotiation of the New Deal

D. 2017 - Referendum campaign

E. 2018 – Implementation of the New Deal or UK

exit from the EU

Phase A: Now to 2014

There are no grounds for optimism that the current

limp recovery in the UK and the rest of the EU will

abate. The UK at least has more elbow room to set

its interest rates and to allow its currency to adjust.

The EU’s Lisbon Agenda has completely failed, as

has the Single Market project, but the European

project will be pushed forward in the hope that

ever greater integration (SEPA, Single Banking

Supervisor etc) will eventually deliver, but it won’t.

During this period the UK will look a slightly better

bet for investment than the rest of the EU, but there

will undoubtedly be caution:

• UK investors won’t be keen to take high risks in

Scotland or in the rest of the EU, with the

prospect of disruption of market access

• EU investors would be looking more to outside

the EU and likewise there would not be much

incentive for non-EU investors to direct their

resources into a low-growth EU – but then the

UK looks slightly more attractive amongst a

rowd of unprepossessing EU candidates.

Phase B: Run up to the 2015 General Election

Scottish independence has reputedly lost

considerable support over the last year. It looks

unlikely that voters will select the Scottish

Nationalist Party’s nationalist/socialist vision of a

kilted people’s community. A Cameron redux –

buoyed up by the consolidation of the UK and the

prospect of the New Deal negotiations – would be an

unstoppable force against a colourless Ed Miliband

and the shop-soiled Nick Clegg:

• Outpouring of optimism (however misplaced) in

the UK, leading to sharp increase in investment

and consumer spending, creating a feel-good

factor that propels Cameron back into Downing

Street with an overall majority

• Remaining EU still stagnant

• EU and non-EU investors board the train for the

UK: champagne corks start popping again

Phase C: Negotiation of the New Deal

Cameron can go into the negotiations with

reinforced personal authority deriving from several

sources:

• Parliamentary majority in the UK

• Upswing of economic activity in the UK,

compared to stagnation in the remaining EU

• Pressure on other EU politicians from their

voters at home: “look at what Cameron and the

UK are doing compared with what is happening

here”

Cameron’s second big risk (and it is a risk because

he wants to stay in the EU) is that this phase is too

long, the UK recovery flags because it was not based

on very much to start with, and he makes little

progress in the New Deal negotiations.

His aim must be to create (between now and 2015)

a connection in the minds of other EU politicians,

EU and non-EU investors that the UK’s continued

membership of the EU is vital to the EU’s future,

but that the UK could have a reasonable future

autonomously outside the EU… and others could

follow it out of the door.

Cameron has to fix this notion in the popular

perception in other EU countries, and crank up the

pressure on EU politicians. Maybe it is not part of

Cameron’s plan but it seems a quite likely scenario

that, against the background of a positive economic

perception of the UK and a correspondingly negative

perception of the rest of the EU, investment monies

will flow into the UK and not into the rest of the EU,

creating a self-fulfilling prophecy.

Mistakenly the EU politicians, in my opinion, will do

a deal with Cameron that they are confident

Cameron can get a Yes vote on, in the hope that this

will bury the issue and allow the rest of the EU to

continue on the integration path. Instead it will

simply be an encouragement to like-minded

groups in other EU countries to demand the same

repatriation of powers as the UK has negotiated.

Phase D: Referendum Campaign

Cameron will want a very short campaign: there’s

the deal, vote Yes or No. The campaign could be 60

days at most, and there will be a large coalition in

favour: business, all Labour and LibDem adherents,

all mass media except the Daily Mail and Daily

Express. The scare story will be loss of market access

and UK jobs and investment. The idea that market

access to a stagnant area has little value will be

drowned out in the enthusiasm.

Phase E: Implementation of the New Deal or

UK Exit from the EU

Against the above scenario it is hard to see how a UK

exit could be the result. Sketching out this positive

and plausible scenario I have convinced myself that

the economic downside risks to the UK that might

materialise as a result of a UK exit are in fact highly

unlikely to materialise, and the main period of

uncertainty is until the Scottish referendum.

A UK still in the EU but enjoying its New Deal will

be an attractive proposition: alleviated from some of

the high costs of EU regulation, but still enjoying

market access into the rest of the EU.

Conclusion

Despite the UK possibly being in a triple dip

recession, Cameron holds all the cards: the LibDems

are almost out of the game and will have to keep the

coalition going until 2015. Labour have no EU policy

at all or an economic policy that is substantially

different from that of the current government.

If Cameron can show even a modestly better

situation in the UK than in the rest of the EU

by 2014, and win the Scottish independence

referendum, he will ride the crest of a wave of

optimism in the UK, boosting investment and

increasing the divide between UK and rest-of-EU

economic performance. Then he is on a home run.

By contrast the rest of the EU’s politicians are bereft

of ideas for improving their situation: very high

unemployment, no economic growth, a socio-

economic model that expects a high standard of

living without the accompanying performance, and

the Euro. It all plays into Cameron’s hands.

Bob Lyddon

Website: www.ibosbanks.com

Last month our sister publication, Lawyer Monthly,

spoke to Terra Firma’s Tim Pryce about the current

private equity landscape. We’ve brought you their

interview in full…

The private equity arena operates in a rapidly changing,

complex, and highly competitive market, subject to a whole host

of legal complexities and challenges. Private equity is defined

by the European Private Equity and Venture Capital Association

(EVCA) as ‘a form of equity investment into private companies

that are not quoted on a stock exchange. Private equity is

distinguished by its active investment model, in which it seeks

to deliver operational improvements in its companies, over

several years’, and is of great importance to the business world

and the development of commerce.

NAVIGATING THEPRIVATEEQUITYARENA:TERRA FIRMA

Special Feature


his month, Lawyer Monthly

finds out more about the

private equity arena by

speaking exclusively to Tim

Pryce, CEO and founding

member of one of Europe’s

leading private equity firms, Terra Firma. Here

he talks to us about his role at Terra Firma,

the current landscape of private equity and the

common legal implications to arise on a typical

private equity transaction.

Please give me a little information

about your role as CEO of Terra

Firma – what does your typical day

include?

No two days are the same. I divide my time

between dealing with people (hiring, coaching

and advising), potential new investment reviews,

portfolio business reviews and meeting investors.

What does the current private equity

landscape look like? Is now a good

time for PE firms?

For a firm like Terra Firma which is focused

on transforming businesses, the landscape is

excellent. As a result of the financial crisis which

we are now coming through, there is a sea of

orphaned assets or unloved businesses which

require the sort of operational intervention in

which we specialise.

What are the most common legal

implications that arise when dealing

with private equity transactions in

Europe?

There are a large number of them, including:

• Providing vendors with certainty of funding

(i.e. equity commitments; equit bridge

commitments);

• The fact that for certain regulations (e.g.

anti-trust, insider dealing) PE firms and their

portfolio businesses are treated as

conglomerates with strange results;

• Marketing regulations across the globe;

• For control investors like Terra Firma, rights

to direct strategy; business plans and other

controls over management teams; and

• Investments from multiple funds.

Has there been an increase in M&As

that have a cross-border element in

recent years? Are jurisdiction limited

deals less common as the business world

becomes smaller?

We have done both but if you look at our recent

deals have been single country (e.g. Everpower,

Consolidated Pastoral, RTR, Garden Centre

Group and Four Seasons Health Care)

What are the main legal/regulatory

implications that arise when dealing

with cross-border deals?

Legal issues for cross border deals include:

− Consents to foreign takeovers (e.g. US, New

Zealand, Australia);

− Anti-trust in consolidation plays;

− In regulated sectors, understanding the

regime and the risk of retroactive changes;

− Employment/pension rights; and − Ensuring

cross border flows of cash in multi-

jurisdictional groups.

Trends also show there is increased

interest in investing in SMEs; is this

something you have witnessed? What do

you think are the reasons for this?

Yes because there is less equity and debt

available now than in the period up to 2007/8.

Terra Firma does not do club deals, and we have

a history of buying platforms and then growing

them.

As its participants become

increasingly institutionalised,

private equity continues to be an

important asset class that enables

managers to control their investments.

What do you feel are the attractions and

benefits of dealing with private equity

firms for businesses?

They include:

− Streamlined decision-making;

− Longer term perspective;

− Better alignment between shareholder and

management;

− Support and expertise; and

− Capital for growth.

What has been the highlight of your

career so far?

Being part of the team that created a business

and seeing that business grow.

What regulatory/legislative changes

would you like to see within the M&A

and private equity sector in Europe?

I would be in favour of anything that discourages

insurance companies/pension funds from

investing in private equity and the recent

Takeover Code changes to the ‘put up or shut up’

rules.

Tim Pryce

Tim began his career practicing law at Slaughter

and May before working at GE Capital,

Transamerica and the Principal Finance

Group of Nomura International plc. Tim is a

solicitor and has an LLB (English law) and an

Associateship from King’s College, London and a

Maîtrise (French law) from the Sorbonne, Paris.

Tim joined Terra Firma as its General Counsel.

In this role, he built and led the Legal,

Structuring, Tax and Compliance teams. He has

been involved in a number of Terra Firma’s

investments and was also a member of its

Investment Advisory and Remuneration

Committees. Tim sits on the boards of the

General Partners and is a member of Terra

Firma’s Management Committee.

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Private Equity

Deal Overview

• South Yorkshire Investment Fund

(through its fund manager YFM Equity

Partners) has returned its holding to

Naylor Industries.

• The original investment was made

through the South Yorkshire

Investment Fund (SYIF) in January

2008.

• As part of the deal, HSBC’s South

Yorkshire Commercial team provided

a £14 million comprehensive finance

package to support Naylor’s growth.

• Naylor Industries plc is a £37m

turnover business with headquarters

in Barnsley and manufacturing

facilities in South and West Yorkshire,

Fife and the West Midlands.

• The company primarily manufactures

construction products (clay and plastic

pipes and concrete lintels) but also

owns gardenware manufacturer The

Yorkshire Flowerpot Company.

• Naylor Industries was founded in

1890. Existing CEO, Edward Naylor,

represents the fourth generation of the

Naylor family to head up the business.

NaylorEdward Naylor, CEO & Bridie Warner-Adsetts, COO

Naylor Industries

For construction product manufacturer, Naylor Industries,

2013 represents a significant year of change. Following a

2008 investment in the company, this year South Yorkshire

Investment Fund exited Naylor through its fund manager

YFM Equity Partners, returning its holding to the

company’s family roots. Finance Monthly spoke to CEO

Edward Naylor and COO Bridie Warner-Adsetts about this

latest milestone in the company’s already extensive history.

aylor Industries plc is a £37mturnover business withheadquarters in Barnsleyand manufacturing facilitiesin South and WestYorkshire, Fife and the West

Midlands. The company primarilymanufactures construction products - clayand plastic pipes and concrete lintels - butalso owns gardenware manufacturer TheYorkshire Flowerpot Company.

The company was founded in 1890 andEdward Naylor represents the fourthgeneration of the Naylor family to head up thebusiness. The last 20 years have seenthe company invest heavily in plantmodernisation, diversification and innovationleading to the company being awarded theaccolade “Best SME” in the IMechEManufacturing Excellence Awards in 2008. Inthe year to February 2012 it had a 14% increasein turnover to £36.6m with operating profitsof £2.4m.

The company currently employs just under250 people and a recent initiative to recruiton all of its sites as part of successionplanning has resulted in the appointmentof six apprentices covering quality,technical, manufacturing and engineeringresponsibilities.

Builders’ merchants account for a majority ofNaylor’s UK turnover. Almost 20% of currentturnover comes from exports, although this isset to expand considerably as a result ofincreasing demand for the company’sproducts from the Gulf and SE Asia.

YFM Equity Partners recently sold itsholding back to Naylor Industries’

management; can you tell us more about thistransaction?

South Yorkshire Investment Fund (SYIF)through its fund manager YFM EquityPartners realised its investment in NaylorIndustries plc making a c2x return on itsoriginal investment; SYIF’s equity holdingwas acquired by Edward Naylor, BridieWarner-Adsetts and David Fletcher, Naylor’snon-executive Chairman who was formerlyChairman and Chief Executive of SheffieldForgemasters;. The original investment inNaylor Industries was made through theSouth Yorkshire Investment Fund (SYIF) inJanuary 2008. Since then it made twofurther investments in the company tosupport operational improvements and newproduct developments. South YorkshireInvestment Fund is now focussing on therealisation of its investments and FinanceYorkshire has taken on the role of investing incompanies across Yorkshire and Humber.

Industries

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Deal of the Month


BuyoutAngela Warner, Portfolio Director at YFM

Equity Partners said: “We have worked closely

with the Naylor team to help the company

develop new products and internationalise its

offering. It has achieved good success in these

areas against a tough economic climate. It is a

strong manufacturing business that can

develop new products that the market

demands. We wish the team continued

success in the years ahead.”

Edward Naylor: “YFM Equity Partners

have been very supportive investors for

our business. They understand the challenges

that manufacturing businesses face and by

following up initial investment with additional

financial support, they have allowed us to

maintain a continuous programme of

investment in business operations and

development of new products. Their

constructive and helpful strategic input has

contributed to our achievement of a c30%

increase in revenues in the face of a severe

downturn in many of our key markets”

As part of the deal, HSBC’s South YorkshireCommercial team provided a comprehensivefinance package to support the firm’s growthin a deal headed by International CommercialManager Lee Bloodworth. The £14 millionfinance package, which includes invoice andequipment finance, was structured to supportNaylor’s international growth plans, with thecompany looking to expand its exportproposition.

Lee Bloodworth, HSBC InternationalCommercial Manager, said: “Naylor hasrecognised the potential of the export marketto its business and as a leading internationalbank, HSBC is an ideal partner to help thebusiness achieve its targets.”

Advisers from Leeds and Sheffield worked on

the deal. Legal advice was provided to SYIF

by Nabarro and to Naylor by DLA Piper. PwC

provided due diligence advice to HSBC. Dean

Gormley, Partner and Northern Head of

Banking & Finance at law firm Irwin Mitchell,

advised HSBC.

What were the main challenges that arose

for you in this deal, and how did you

overcome them?

Despite the prevailing view that SME finance

was difficult to come by, the company’s recent

track record of profitable growth and the

excellent prospects in overseas markets

ensured that an acceptably priced offer was

forthcoming from HSBC. Of course it was not

without the usual challenges, however, the

availability of finance and the reception we

received has added to our confidence for the

future of the Company.

What does this mean for the company,

now and further down the line?

Edward Naylor: “Going forward, we see

fantastic prospects for our products in

overseas markets and we will be seeking to

maintain the recent dramatic growth in export

sales. We have a great history of making

quality British products and the team looks

forward to continuing the development and

growth of our business,”

Bridie Warner-Adsetts: “Our team have put

the work in to change the fortunes of the

business despite the economic backdrop. We

have invested in manufacturing processes,

quality and service and this is reaping rewards

that will continue to improve the way we do

business. Most importantly we have invested

in our people and the return on that is

palpable. We are cultivating a customer and

employee centric business”.

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About the CEO & COO

Edward Naylor is CEO of Naylor Industries plc.Edward is a double prize-winning CharteredAccountant who worked in the City foraccountants Touche Ross prior to taking overthe company following the death of his fatherin 1993.

Bridie Warner-Adsetts is COO of NaylorIndustries plc. Bridie held senior boardpositions in a number of manufacturing andconstruction products businesses beforejoining Naylor in 2010.

Deal of the Month

The Interview


The Interview...

Each month, Finance Monthly brings you

‘The Interview’

The Interview is specifically designed to bring you

detailed insights into recently finalised deals, straight

from those at the centre of their developments.

This month we have the pleasure of speaking with:

Désirée van Boxtel, Cilian Jansen Verplankeand Hadewych Cels, co-founders of KarmijnKapitaal, an investment fund with a unique focus.

Désirée, Cilian and Hadewych guide us through

Karmijn Kapitaal’s work, their passion for working

with SME entrepreneurs, and their latest investment

in innovative healthcare solutions developer and

manufacturer, YouMedical.

The Interview

The Interview...

The Interview


Karmijn Kapitaalfounders and partners Désirée van Boxtel, Cilian Jansen Verplanke and Hadewych Cels

Can you give us an overview ofKarmijn Kapitaal and its work?

Karmijn Kapitaal is a Dutch PE fund,investing in growing, profitable, DutchSME companies that are led by a mixedmanagement team, consisting of both menand women. Our focus is growth financingand buy-outs, our target fund size is €50m, ofwhich we have now reached over €40m. Wehave been investing since 2012, we havefunded two companies in our first year.

What makes Karmijn Kapitaalunique?

First of all it is our focus on mixedmanagement teams, consisting of men andwomen. We have no activist reasons for thisfocus, only purely economic, leading to aboveaverage results for our investors. The firstreason is that research shows time andtime again that companies led by a diversemanagement team generate more stable andhigher financial returns. In addition theyoften achieve higher levels of innovationand creativity and employee/customersatisfaction. These companies are often “greatplaces to work” and have an inclusive andpositive culture. It is in fact the combinationof management styles – strict and caring,action oriented and thoughtful, risk takingand risk managing – that helps companies

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Innovative methods, excellent returns, and unique access to investment opportunities – these

constitute the ethos of Karmijn Kapitaal’s investment focus. Investing since 2012, Karmijn has

funded two diverse companies with this approach, its latest being YouMedical. Finance Monthly

spoke to Karmijn’s founders and partners Désirée van Boxtel, Cilian Jansen Verplanke and

Hadewych Cels about their latest venture and their signature approach to investments.

reach higher financial results. Differentvisions and leadership styles in one team leadto weighted and better decision making.

The second reason is that companiesmanaged by a truly diverse management team(they make around 15% of Dutch SMEcompanies, totalling 10,000 companies) aretraditionally underserved by existinginvestors, and represent less than 1% of theircurrent portfolios. These SME-companiesapparently do not tend to find their way tothe traditional investors and vice versa. Thereappears to be a large distance and no feelingof a ‘click’ between rather tradional financialexperts and entrepreneurs. We source ourdeals through connections with womenin these teams, leading to proprietaryinvestment opportunities.

Another thing that makes us unique is thevery active, dedicated and helpful way wework - our methods are new and outstanding.In addition to the traditional focus onfinancials and efficiency, we integrate ‘softer’issues of entrepreneurship, like employeeand customer care, long term aspects andstimulating innovation. Prior to ourinvestment we perform thorough duediligence, not just of the market andfinancials, but also of the management team,the diversity in leadership skills, employeesatisfaction and the culture of the company.

During our investment period our role is to

closely support the management team in

improving the company results, without

taking over their management role. We make

high returns within the portfolio companies

and in the fund, by expanding the positive

effects of diversity. It is our strength to help

companies reach the top.

Karmijn Kapitaa recently

invested in YouMedical; can you

tell us more about this?

We have taken a minority stake in Amsterdam

based YouMedical, a company founded in

2006 by Jan Herweijer that develops and

markets innovative over-the-counter

healthcare products. One of its early claims

to fame was HemoClin, the first treatment

for haemorrhoids with a user-friendly

applicator, with which YouMedical cornered

the market. The company went on to develop

Nailner, an innovative antifungal nail

treatment and a host of other products.

Today, YouMedical’s products are sold in over

fourty countries. Its innovations and product

development are highly appreciated by

drugstores and pharmacists but especially by

consumers. We are thrilled to be a part

of YouMedical’s future and see major

opportunities for growth, both in the

Netherlands and internationally.

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The Interview

What attracted Karmijn Kapitaalto YouMedical?

Aside from the outstanding position YouMedical takes in its market, what attractedus the most was definitely the team. JanHerweijer is a driven entrepreneur who wantsto make YouMedical the best of its kind andthe company’s young team is just asdedicated. Together they have proven tobe very successful and you can feel theentrepreneurial spirit when you walk throughthe door. For an investor that is focussing onlong term sustainable relationships thecooperation with management team is key.

Of course the team is gender diverse, Jan'scounterpart is a female CFO.

What are the challenges of thisinvestment?

In the coming years, YouMedical’s focus willbe on further international expansion andproduct development, this challenge perfectlymatches the Karmijn active strategy of valuecreation. We have extended backgrounds intaking companies further, from the point thatmanagement feels it could use a partner infurther expansion. In our experience it ismainly the most visionary entrepreneurs thatreach out to find not just money, but apartnership with an investor. We feel verystrongly that this requires us to be close to thecompany. One of our partners will always beinvolved for at least a day per week, mostlyeven on site.

In the case of YouMedical this means thatKarmijn will be actively assisting in severalprojects. Firstly, we are supporting themanaged expansion of the sales andmarketing capacity of YouMedical. Furtherwe are actively pursuing take-over

opportunities, mainly by adding outstanding

brands to the portfolio.

YouMedical’s management welcomes our

cooperative mode of investment; we give

them access to the knowledge, network and

funds that will allow them to accelerate the

realisation of their ambitions.

What does the future hold for

Karmijn?

Karmijn has some time left to raise the last

part of funding of the Karmijn Kapitaal Fund

I. We are currently speaking to several very

interested parties. We are now being

perceived as 'mature primary' or 'early

secondary' by LP's, as they are now able to

learn more about our track record in this

fund.

As for ourselves, our passion lies in working

with SME entrepreneurs, and sharing our

value creation experience. We have now

proven to have access to proprietary deal flow,

and are thus working with several SME

companies as potential new investments, and

enjoying it very much!

The Karmjin PartnersKarmijn partners Désirée van Boxtel, CilianJansen Verplanke and Hadewych Cels knoweach other from former employers and fromthe Dutch private equity community.Currently, all three partners are involved inexecuting transactions and creating value.

Désirée van BoxtelDésirée has seventeen years of experience inprivate equity and entrepreneurship. She hasbuilt and managed ABN AMRO Participatiesfor SME companies and managed privateequity investments for seven years both forABN AMRO and for informal investors. As anentrepreneur herself for the last ten years,Désirée successfully built her own interiorproduct company which she later sold in2007.

Cilian Jansen VerplankeCilian has over twenty years of experience inthe financial sector in private equity and com-mercial banking at ABN AMRO and Rabo.She worked together with Desiree for fouryears at ABN AMRO Participaties. Cilian alsoworked in commercial banking andEquity Capital Markets at ABN AMRORothschild and has most recently beenExecutive Vice President responsible for largebusiness at Rabo Group.

Hadewych CelsHadewych has a background in hands-onprivate equity, consulting and entrepreneurialmanagement and in the last eleven yearshas managed the investment in and theturnaround of redundant factories ofmultinationals. Hadewych co-founded theturnaround investment firm Plain Vanilla andmanaged several entrepreneurial ventures inboth the software and airline industry. Shegraduated in Economics and Mathematicsand has a Harvard Business School MBA.

Karmijn Kapitaalfounders and partners Désirée van Boxtel, Cilian Jansen Verplanke and Hadewych Cels

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our passion lies in

working with SME

entrepreneurs, and

sharing our value

creation experience.

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SPOTLIGHTON...

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This month we look at:

Business Aviation

Aircraft Registration

Debt Recovery

Fund Administration

Investment Funds

Insolvency & Restructuring

Real Estate & Infrastructure

Transfer Pricing During Economic Crises

Trusts & Property

Women in Finance

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Campomori – Aviation & Law provides Italian and cross-border legal adviceand was established by Franco Campomori, an attorney with extensive infrastructureand aviation experience. Before setting-up the firm, Mr Campomori’s practiceincluded infrastructure and asset finance. Up until 2006 he was a partner with leadingEuropean law firm Freshfields and was previously an associate in London withleading banking firm Allen & Overy. Here, he provides information on some recentregulations that are impacting the aviation business in Italy.

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BUSINESSContact:

Campomori - Aviation & Law

World Trade Center

Via Lugano 13

6982 - Agno

Switzerland

[email protected]

www.campomori.com

Can you tell us more about Campomori -

Aviation & Law and its main areas of

expertise?

Campomori – Aviation & Law’s current areas

of practice include:

• Business and private aircraft purchase,

financing, management and restructuring

arrangements

• Providing access to airport infrastructure

and tariff systems

• Issuing advice to operators providing

ground handling services

• Proving tax advice on dedicated topics such

as the recent Italian taxation of private

aircraft or Aerotaxi passengers tax

Who is your typical client and what are

the most in-demand services you offer?

Typical clients include: owners of business and

private aircraft, European and Swiss operators

of business jets, airport managers (with focus

on business aviation terminals) and airport

handlers.

Given the critical European (and particularly

Southern European) economic environment

and the reduced demand for private and

business aviation services a considerable

amount of time is dedicated to restructuring

arrangements deriving from defaulted leases

and restructuring of corporate and aircraft

operations to improve aircraft and operation

profitability. This often entails moving

away from a pure charter business model

and focusing on long terms contracts or

management agreements reducing the

operator’s exposure to the market.

Is there a recent legislation or regulation

that has impacted the aviation sector in

your jurisdiction?

The most significant changes, not necessarily

positive for the sector, are in the field of

taxation, since the recent Government tax

measures have extended heavily also to

aviation.

During the course of 2011 and 2012, private

aircraft have been taxed as “luxury assets”

alongside yachts and powerful cars. Deemed

income legislation has also been introduced on

the basis of hours flown by private pilots

and this has led to a significant number of

de-registration requests and aircraft being

placed in the sale market.

The business aviation sector has been targeted

with the introduction of chartered (Aerotaxi)

passenger’s tax on domestic and International

flights. The rates of such tax are hardly

justifiable and also legally doubtful, and, when

compared with other European jurisdiction,

have contributed to the decline of the business

aviation traffic.

Legislation aimed at ensuring that non-Italian

operators pay full social contributions with

regard to their Italian employees and

operations has also been introduced.

What do you foresee and would like to

see for the Italian aviation sector in the

short term?

Given the current status of the market and

traffic, margins for a cautious recovery can be

expected but a certain amount of confidence in

the jurisdiction and the sector will need to be

restored through more appropriate and less

invasive taxation and legislative measures.

Generally, consultation processes with the

regulatory, airport authorities and tax

authorities should be introduced consistently

and exercised more effectively, to ensure that

tariff systems and tax revenue generation will

not translate into a greater economic and

image damage to the sector and country.

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Franco Campomori, Founder of Campomori - Aviation & Law

AVIATION ITALY

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AIRCRAFTREGISTRATION

IN MALTA

Contact:Francis J. Vassallo & Associates Ltd

/ FJV Aviation Ltd

259, St Paul Street

Valletta, VLT 1213

Malta

Tel: +356 2299 3100

Fax: +356 2299 3101

Email: [email protected]

[email protected]

“The Maltese Aircraft Register has grown by some 21% since the launch of a suite of legislationaimed at making Malta a leading jurisdiction for aircraft registration and an attractive location tobase aviation companies. The number of registered aircraft now exceeds one-hundred whilst morethan thirty applications for Air Operators Certificates are being processed.” FJV Aviation Ltd ispart of the Francis J. Vassallo & Associates Group, which specialises in tax and advisory services,corporate and management services, and other financial services. Mr. Frans Camilleri, ManagingDirector of FJV Aviation Ltd and one of Malta’s leading aviation experts spoke to Finance Monthlyabout aircraft registration and aviation businesses in Malta.

What are Malta’s objectives in this area?

Over the last fifteen-years, Malta has becomesynonymous with extremely favourableconditions for financial services providers andfor its shipping register. This is because Maltahas married an attractive financial offer withoperator-friendly legislation, yet retaining thesolid reputation it has built for good governance.This is in addition to the availability of ahighly-educated workforce, an excellent physicalinfrastructure, attractive living conditions, andcosts that are still considerably cheaper than inthe rest of the EU.

Malta’s foray into aviation is part of a long-termstrategy to develop the services sector evenfurther. The aim is not necessarily to have a largeaircraft register, but to offer a niche to operatorswho want to improve their bottom-line withinthe EU’s regulatory environment. In the sameway that Malta has an excellent reputation inthe financial services sector and in shippingregistration, the Maltese Government wantsto assure excellence in aviation, be it aircraftregistration, transport operations, aerospacetrading, and aircraft leasing.

What are the fiscal benefits?

Aviation companies, just like any other Maltesecompanies, are chargeable to tax in Malta at theflat rate of 35%, although the combined overallMalta effective rate of tax applicable in respectof income or gains accruing to or realized by aMaltese company may be reduced substantiallyby application of the refundable tax credit systemavailable in Malta.

With particular reference to the Aviationbusiness, there are also interesting tax planning

opportunities in line with the principlerecognized in Article 8 of the OECD ModelConvention dealing with the place of effectivemanagement of an enterprise. Other advantagesalso apply to aviation businesses, particularlywith respect to the claiming of deductions andcapital allowances.

Notwithstanding the above, Malta is not sellingitself solely on what it can do for the bottom-lineof businesses. That would be a short-sightedstrategy. Malta wants aviation businesses torelocate to Malta for the long-term, and this iswhere many other considerations come intoplay. For example, the ease of doing business.

How accessible are the competentauthorities in Malta?

Aviation companies will find that the CivilAviation Directorate, the Inland Revenue andthe VAT Department are very accessible andapproachable. Meetings can be held at shortnotice, personnel can be reached without aproblem, and the Government listenscontinuously to the specialist firms, likeourselves, who operate in the sector.

Have there been any recent initiatives?

Indeed. The latest initiative was launched lastOctober, when the Maltese VAT Departmentissued guidelines with respect to a “VATsimplification measure‟ relating to the leasing ofaircraft for private use.

This initiative mirrors an extremelyadvantageous VAT incentive offered in the localshipping industry, which has led the Malteseshipping register to become the largest registerin Europe. It is based on the “use and enjoyment”

test emanating from article 59(a) of the EUDirective (206/112/EC). The VAT Departmenthas devised a formula to determine the extent of‘use and enjoyment’ of the aircraft which willtake place within the EU. In this way, the VATdue upon the importation of the aircraft into theEU may be reduced drastically, the extent of thereduction depending particularly on MaximumTake-Off Mass (MTOM) and range of the aircraft.

The VAT Simplification Measure applies wherethe following conditions are satisfied: the leasingagreement must be between a lessor and a lesseewho are both established in Malta and whowould not be eligible to claim input tax in respectof the lease; the lease agreement shall not exceeda period of 5 years and the lease instalments shallbe payable every month; the Director General(VAT) may require the lessor to submit detailsregarding the use of the aircraft; and inconsidering and approving applications, theDirector General (VAT) may impose otherconditions which he may deem appropriate. Ifthe lessee exercises an option to purchasethe aircraft at the end of the lease, a VAT paidcertificate will be issued provided that all VATdue has been paid.

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Mr. Frans Camilleri, Managing Director of FJV Aviation Ltd

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So far, 2013 has continued the difficult economic trend that the UK has faced in

recent years, and as the global economic crisis drags on, concerns over cash flow

remain persistent. Keith Jones, Director of The Keith Jones Partnership, solicitors

specialising exclusively in commercial debt/contract litigation and enforcement,

spoke to Finance Monthly about a bespoke approach to debt recovery and

navigating the potentially detrimental legislations that govern it.

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Can you tell us a little about yourself, yourprofessional background and your firm?

After 15 years as a Haematologist in the localPathology Department, I decided to retrain as alawyer. The transition from blood tester tobloodsucker was remarkably smooth! Sincequalification, I have specialised in debt recovery,contractual disputes and commercial litigation.

I am now the Managing Director of KJPLaw Limited (trading as The Keith JonesPartnership) which was formed with myco-directors Nick Brown and Brenda Li in 2006.We all specialise in business-to-business debtrecovery and general commercial contractclaims. We feel that by specialising in one nichearea of law, rather than practising across abroad range, allows us to become experts in thefield and can focus on what we do best!

We are very pleased to have obtained nationalrecognition for our work with our first entrylast year into the Legal 500 in the DisputeResolution, Debt Recovery category for theNorth West area. The Legal 500 Seriesprovides the most comprehensive review andcommendation on legal services providersworldwide and is often referred to for its

definitive editorial of law firm capabilities. Thisprovides our clients and prospective clients withcertainty as to the quality of service we provide.

Can you tell us about your debt recoveryservices and your approach?

We aim to provide high quality yet cost effectivedebt recovery and commercial litigationservices. We are aware that all too often the onlywinners in litigation are lawyers and thereforewe endeavour to provide a pragmatic andcommercial approach together with giving 'nononsense' legal advice.

In our experience, far too many debt recoveryagents and legal advisors recommend thatissues are not raised in detailed correspondenceand parties are advised to keep their powder dryand simply press on with the legal process (wesuspect that this may be done to maximise theircharging opportunities). We do not agree withthis philosophy; in fact we take the polaropposite approach. If our client has a very goodcase then we spell out in detail the strength ofthat case and make it clear to the debtor thatdefending the claim will only lead to anincreased liability in respect of our client’s costs.If our client has a weak case, then we inform

them of this at an early stage and encouragethem to make realistic proposals for settlement.Trials are expensive and the outcome oftenuncertain, because it is ultimately down to theJudge’s interpretation of the case. By focusingthe parties efforts into negotiating a settlement,significant legal expense can be avoided, and astestament to my abilities as a negotiator, I haveonly had one case go to trial in the last six years. This philosophy is genuinely appreciated byour clients. It means that we have been able tomaintain a loyal client base who return tous again and again for their debt recovery andlitigation requirements.

What processes do you deploy as part ofthis service?

We provide the entire spectrum of legal debtrecovery services, primarily dealing in businessto business debt recovery, commercial litigation,enforcement, insolvency proceedings, tenancyeviction and rent recovery, service charge andground rent recovery.

We cover the entire process from sending out aninitial letter of claim, right up to enforcing adebt. The debts we collect range from £1,000 (itis rarely cost effective to instruct a solicitor for a

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Keith Jones, Director of The Keith Jones Partnership

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Contact:Keith Jones

KJP Law Limited t/a The Keith Jones Partnership

First Floor Birkenhead House

17-21 Price Street

Birkenhead

CH41 6JN

Direct Telephone: 0151 650 6831


www.kjplaw.co.uk

largely as a result of word of mouth. We nowhave several clients from Europe, India, Chinaand the USA.

Has the deployment of debt recoveryservices increased with the growing

financial concerns of recent years?

Not as much as you might expect. Businessesare certainly more switched on to theimportance of cash flow and instruct us earlierthan previously to start the debt recoveryprocess. However, most sensible businesseshave tightened up their own credit controlprocedures and have therefore been moreprudent with regard to extending credit facilitiesto their customers. We have seen an increase inthe number of debtors who cannot pay asopposed to those who genuinely have a disputewhich means that our clients are more likely togo down the insolvency route against suchdebtors, as opposed to obtaining a county courtjudgment.

Are there any future or existinglegislations that significantly impact

(positively or negatively) the debt recoveryprocess?

Courts are expensive to run and successivegovernments have therefore tried to bring inlegislation that makes it as unattractive aspossible for anybody to have to resort to legalproceedings. This includes the introduction ofpre-action protocols which usually have to befollowed before proceedings commence, a movetowards making mediation compulsory, and thelatest measure is to increase the small claimslimit from the present level of £5,000 up to£10,000, or possibly even £25,000. Each ofthese measures are commendable in cases inwhich there is a genuine dispute, but play intothe hands of debtors who have no dispute andare just looking to play for time. The majorfeature of the small claims court is that thelosing party does not have to pay the costs of thewinning party. This allows ‘small’ claims tobe litigated without either party racking up

disproportionate costs. The problem is thatthe costs liability of the losing party is a realincentive for them to settle a case early on inproceedings. If they have no risk of a costsliability, then many debtors are happy to taketheir chances at a trial. Whilst this may beacceptable in cases for less than £5,000, I do notconsider debts of £10,000 or £25,000 to be‘small’ and businesses will suffer if a debtor candelay in this way. Moreover, I do not believe thatthe court system is going to be able to cope withthe increased number of trials, particularly incases where debtors represent themselvesrather than instructing solicitors. Peoplewithout the benefit of legal advice usuallypresent their case in a haphazard way, leadingto the risk of adjourned trials.

Is there anything else you would like toadd?

As a relatively small firm in an unfashionablepart of the country, we have built up aloyal client base including several blue chipcompanies and internationally recognisednames. We are significantly less expensive thanour more established City competitors and havegained recognition through inclusion in theLegal 500. One further advantage over many ofour competitors is the fact that we allocateone solicitor to every case and clients dealexclusively with that solicitor. We are awarethat many of the big firms will have two or threedifferent lawyers working on the same case.

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debt of less than £1,000) right through to severalmillion pounds. The initial process involvesobtaining a Judgment, and this can be doneeither through negotiation; summary judgmentin cases in which the claim is overwhelminglystrong; alternatively through an applicationmade to the court in respect of any default orfailure by a debtor to follow the court ordersand/or rules; or, rarely, at a trial. If the debtorfails to satisfy a judgment, we offer the fullrange of enforcement services which includeinstructing high court enforcement officers,freezing the debtor’s bank account, obtainingcharging orders over any property owned by thedebtor, obtaining attachment of earnings, or byforcing the debtor to attend court to give detailsof their assets.

We also issue insolvency proceedings againstdebtors. This is often the preferred option incases where it is clear there is no dispute and thedebtor has the means to pay but is playing fortime to aid their cash flow.

We pursue debts against parties basedthroughout England and Wales, but also outsideof this jurisdiction. We are one of very few firmswho apply the system of obtaining a EuropeanOrder for Payment and European EnforcementOrders against debtors based elsewhere inthe European Union. This can be an effectiveprocedure and is so rarely used by othersolicitors (presumably because they areunaware of it) that we have had to advise thecourt as to what they are required to do in orderto comply with the legislation. We also havereceived instructions in the last year to pursuedebtors outside of the E.U., including the USA,Nigeria, Singapore and China.

Can you give us an insight into your typicalclient?

The vast majority of our clients are businessesranging from sole traders to multinationalglobal enterprises and numerous well-knownhousehold names. We have recently seen anincrease in instructions from overseas clients,

RECOVERYUK

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Legislation and regulations for the investment funds sector have recently seen asubstantial overhaul such as the 2012 Mutual Funds Bill amendment and theintroduction of new FATCA requirements. These changes have introducedadditional compliance burdens. Kent Barnes, legal counsel within U.S. BancorpFund Services, LLC identifies the impacts that these changes are having and offerssome words of advice for fund management in 2013.

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...FUND Contact:Website: www.usbfs.com

About U.S. Bancorp Fund Services

U.S. Bancorp Fund Services combines the

services of a large financial organization with a

highly personalized environment to provide

every client with customized service solutions.

Still servicing its first client since 1969, U.S.

Bancorp understands that the foundation of

a strong relationship is built upon open

communication, trust, and accountability. Since

launching the Alternative Investments division

in 2000 to support unregistered onshore and

offshore privately offered investments, U.S.

Bancorp Fund Services has experienced

significant growth in the alternative investment

space. By building a company through investing

in each client’s future, U.S. Bancorp has created

an intricate network that spans the globe

giving clients the support they need to focus

on investment management and portfolio

performance.

As legal counsel within U.S. Bancorp Fund

Services, Kent Barnes specializes in the legal

needs of pooled investment products and

alternative investment structures. Mr. Barnes

has been with U.S. Bancorp Fund Services for six

years, and has more than 18 years of securities

experience. Prior to joining U.S. Bancorp, Mr.

Barnes served in the securities industry for

seven years as a FINRA licensed representative

and legal counsel for an alternative product

administrative firm. In addition, Mr. Barnes

specialized in private placements, corporate, and

securities law while with Reinhart Boerner Van

Deuren, S.C.

The 2012 Mutual Funds Bill and Its Impact

The Mutual Funds (Amendment) Law updates

definitions within the Mutual Funds Law relating

to the registration of Cayman master funds with

the Cayman Islands Monetary Authority (CIMA).

Previously, Cayman master funds were not

required to be registered if funds had only one

regulated feeder fund or one or more direct or

indirect regulated feeder funds. The amendment

now brings all master fund entities within the

scope of the registration regime and mandates

that all entities register with CIMA.

New FATCA Requirements for Fund Investors

The Foreign Account Tax Compliance Act

(FATCA) enacted in 2010 is an important

development in efforts to combat tax evasion

by U.S. persons holding investments in offshore

accounts. Under FATCA, certain U.S. taxpayers

holding financial assets outside the United States

must report those assets to the IRS. FATCA also

requires foreign financial institutions to report

to the IRS certain information about financial

accounts held by U.S. taxpayers, or by foreign

entities in which U.S. taxpayers hold a

substantial ownership interest. In addition,

certain U.S. taxpayers making payments to

foreign taxpayers must gather information on

these foreign taxpayers to avoid tax withholding

on the payments.

U.S. Bancorp has combined knowledgeable

servicing experts with leading industry

consultants to identify and document FATCA

processes and procedures to assist clients as they

begin making adjustments to meet FATCA

requirements.

Fund Management Advice in 2013

Investors contemplating significant

commitments will often require increased due

diligence of a potential or current manager’s

operations. In addition, the challenging

regulatory and investment environment

demands increased transparency, risk

management, and compliance. Some investors

may value greater communication regarding

how the funds and the investment manager are

preparing for new regulations such as FATCA

and AIFMD. Others may value engagement

through regular meetings or conference calls

involving a multi-disciplined team of trusted

advisers, independent council, independent

accountants, administrators, and internal

resources from front/middle/back office to

better understand the interdependencies of

new regulations and share how each area is

preparing to meet their unique needs. Key to this

process is a partnership with a service provider

committed to the success of a fund and its

investors. Backed by experience and a dedication

to compliance, U.S. Bancorp Fund Services can

assist clients in meeting the evolving demands of

today’s investors.

Specialized Alternative Investment Expertise

U.S. Bancorp’s statutory compliance service is

designed to help a client meet legal requirements

in a global market. In addition to basic registered

office services, U.S. Bancorp Fund Services

offers a full suite of alternative investment

services to support both managers and fund

directors. U.S. Bancorp Fund Services’ goal is to

enhance the administrative and compliance

capabilities of clients, regardless of the intricacy

of their products, and allow them to focus on

investment management. A comprehensive team

of professionals offer substantial industry

experience and an understanding of the

underlying goals of unique funds and asset

classes ensuring that clients receive a best-in-

class customized servicing experience.

Kent Barnes, legal counsel within U.S. Bancorp Fund Services

IN THE CAYMAN ISLANDSADMINISTRATION

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FUND SPOTLIGHT ON...

INVESTMENTFUNDS IN JERSEY

Contact:James Brasher, Managing Director

Alter Domus (Jersey) Ltd

1st Floor, Waterloo House, Don Street

St Helier • Jersey, Channel Islands • JE1 1AD

Tel: +44 1534 826 000

Fax: +44 1534 826 026


Website: www.alterdomus.com

James Brasher, a Fellow of the Institute of Chartered Accountants in England

and Wales, has over twenty years experience in financial services and is

Managing Director at Alter Domus Jersey and Alter Domus Guernsey. James is

approved to act as Director in Jersey by the JFSC and in Guernsey by the GFSC

and possesses a wealth of experience in the fund industry.

Can you tell us more about Alter Domus?

Alter Domus is a leading global provider ofprofessional administration services foralternative investment funds and multinationalcorporations. Independently owned by currentmanagement since 2003, Alter Domus hasfollowed a multi-year expansion plan resulting in15 offices and desks across four continents.

Our 600 employees provide strong expertiseacross the entire value chain of investmentstructures: from fund administration to corporateservices. We offer outsourcing solutions formiddle and back-offices, including theimplementation of structures, investor relations,investment processing, accounting, tax, regulatoryand compliance requirements of legal structuresestablished by our clients in each of thejurisdictions in which we operate.

We specialise in providing services to privateequity, real estate, and private clients andmultinationals. The scope of our fully-integratedcorporate services includes: company formationand liquidation, corporate secretarial services,daily administration and management,accounting and tax compliance. We also provideindependent directors for the companies weadminister.

Key factors to our success include: a central pointof contact who expertly manages our clientrelationship across jurisdictions, experiencedlocal operational teams and a cutting-edge globallyintegrated IT system. A substantial amount ofour revenue is derived from the alternative fundindustry and our dedicated Fund Services Teamshave an in-depth knowledge of the global technicaland operational issues that are necessary tosupport expectations from both general andlimited partners. Alter Domus has over $22 billionof assets under administration (AUA) for FundAdministration Clients.

We are proud to serve 12 out of the 20 largestPrivate Equity houses and 10 of the 30 largest RealEstate firms in the world.

Jersey is a well-know financial centre. Howdoes Alter Domus fit into this revered

financial jurisdiction?

Alter Domus has always sought to service theneeds of its clients in the jurisdictions in whichthey operate. Many of our existing clients havestructures in Jersey and it was at their request thatwe set up an office so as to provide a verticallyintegrated service and allow them to benefit fromthe subsequent economies of scale.

How has the Jersey fund industry changedin recent years and what changes are we

likely to see in the future?

Two of the biggest changes that the fund industryhas witnessed in recent years have been thedevelopment of systems and Client Due Diligence.Quality fund administrators have world classsystems, and continue to develop these to meet theneeds of their clients. With regards to Client DueDiligence, quite rightly there is an ever increasingfocus on the identification of the client and theirsource of wealth. Engaging with an administratorwho has a developed a compliance function willallow both the benefits of an experiencedapproach to Client Due Diligence collection andalso the ability to share that information withinthe group when the administrator is engaged inmore than one country.

What do you think is the main considerationa client should take ahead of investment?

Service providers have historically been countryspecialists, with few providing a truly multi-jurisdictional offering. However, as fundstructures and the legislative and regulatoryenvironments become more complex, the abilityof a service provider to operate across a wide

spectrum of countries and services is becomingincreasingly important. Horizontal and verticalintegration are key factors to consider whentalking about efficiency.

Can you tell us about the fund services thatAlter Domus can offer investors and your

approach to their practice?

The constantly evolving regulatory framework andthe creation of new fund products mean that thedomicile of choice for a fund is prone to change.As an international firm, Alter Domus seeks tooffer potential clients an impartial view onfund establishment, we do not view our role aspromoting one structure over another - our fundadministration system is used in exactly thesame way across all of our offices, and we areequally well placed to service clients in any of thejurisdictions that they may be considering.

Is there anything else you would like to add?

Any fund seeking a vertically integratedengagement should also be looking to share insome of the economies of scale that can beachieved by an administrator operating amultijurisdictional structure. A goodadministrator should remain agile enough toaccommodate both local requirements andbespoke client needs, this also means being ableto offer access to a robust multi-jurisdictionalplatform, which generates economies of scalewith a uniformly best practice approach to clientservice.

James Brasher, Managing Director at Alter Domus Jersey and Alter Domus Guernsey


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“Jersey is a long established major centre for offshore funds and one of

the key features of Jersey’s fund industry is the flexibility and range of

structures and corresponding regulatory framework that can be used for

funds, with a suite of options from heavily regulated retail funds through

to fund structures suitable for the most sophisticated investors” Moore

Stephens Partner, Nick Solt spoke to us to underline some of the latest

developments facing this leading financial centre and its core industry.

SPOTLIGHT ON...

INVESTMENTFUNDS

Please introduce yourself, your professionalbackground and your firm

I trained as a Chartered Accountant in generalpractice in the UK, and after qualifying in 1998, Imoved to Jersey to work for Moore Stephens inour audit department. Early on, I was secondedinto an area dealing with large real estate andfund promoting clients in order to cover for aperiod of staff change. This was a growingarea that has since become the separate fundservices business that is Moore Stephens FundAdministration Limited, and when theopportunity to extend my time in this area wasoffered, I gladly accepted, as it was an excitingtime of growth in the Jersey funds sector.

Since then, I have worked my way up through theranks to become a Partner of Moore Stephens,Jersey and a Director of Moore Stephens FundAdministration, a role in which I am involved inoverseeing the provision of a quality, bespokefund administration service to our clients, as wellas sitting on the board of a number of fundstructures and being responsible for a great dealof the business development effort beingundertaken by the company.

Can you give us an overview of the Jerseyfund industry?

Jersey is fully compliant with international

standards and bodies, such as the IMF and OECD

and can provide a tax neutral jurisdiction where

investors are not burdened by further tax levies

other than those due in the investor country of

origin and the jurisdictions within which the fund

invests. This is of particular advantage where the

investor profile in a structure is multi-national

which would lead to excessive complications and

cost burdens were it is necessary to work out

double taxation reliefs and other issues for all

parties involved.

Jersey also benefits from having a range of

both major and boutique fund administrators,

custodians, leading law firms, accountancy firms

and the Channel Islands Stock Exchange enabling

Jersey to provide a high standard of professional

service to meet all the needs of a sophisticated

investor, a fund promoter or those merely looking

for a stable home for their hard earned assets.

Moore Stephens provides specialist fund

administration services; can you tell us

more about these?

Moore Stephens Fund Administration Limited

is a well-established, Jersey based, dedicated

provider of specialist, bespoke fund administration

and accounting services across a range of asset

classes and jurisdictions meeting the needs of

both private and institutional clients. We deliver

high quality bespoke reporting that can be createdto suit client needs and requirements, adoptinginternational, UK or US accounting standards asnecessary and our accountancy training gives us anin-depth understanding of both administrationand financial issues with a focus on problemsolving.

Our team is comprised of a high standard offully qualified professionals with extensiveadministration, accounting, legal and regulatorycompliance qualifications and experience. Wevalue long standing client relationships andsupport small start-ups to those holding in excessof a billion Euros of assets. I believe it is ourattention to detail and reporting expertise alongwith the treatment of all clients as being uniquethat sets us apart.

Can you detail the other services MooreStephens can offer investors?

Our links to the wider Moore Stephens networkgive us the advantage of having localised advice inall major jurisdictions which can be invaluablewhen working with structures across multiplejurisdictions. Within Jersey we have a risk andrecovery team with whom we work to provideservices to distressed funds. This combination ofservices proved useful during the economicdownturn although, I might add, not for any of thefunds we administer ourselves!

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Nick Solt, Partner at Moore Stephens

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Contact:Nick Solt

[email protected]

Moore StephensP.O. Box 236

First Island House, Peter StreetSt. Helier

JerseyJE4 8SG

Channel Islands

Tel +44 (0)1534 880088

Fax (0)1534 880099

the detail of fund performance by investors andthis has led to a demand for tailored reportingthat is specific to their individual needs. However,at Moore Stephens Fund Administration, we seethese extra demands as an opportunity forthe quality service providers to differentiatethemselves as they meet these challenges withoutallowing them to affect the service that isprovided.

What is The Jersey Private Placement FundRegime?

Recently the Jersey authorities have introducedan additional option to the range of possible fundregimes under which prospective fund promoterscan launch a collective investment scheme. Thenew Private Placement Fund regime provides theflexibility to allow promoters to move quickly totake advantage of an investment opportunity,particularly where those fund promoters haveaccess to a pool of core institutional or othersophisticated investors who are able to make theirown informed investment decisions without theneed for the added comfort of in-depth regulatoryreview.

The PPF is designed for structures to be promotedto a maximum of 50 professional or sophisticatedinvestors - a professional investor being someoneof proven experience able to make an informedinvestment decision and a sophisticated investorbeing one who is able to invest a minimum of£250,000.

A PPF must have a Jersey based designatedservice provider acting as administrator who isresponsible for ensuring that the PPF’s promoterand documentation meets prescribed criteriaand making the fund application to the JerseyFinancial Services Commission.

The Jersey Financial Services Commission(JFSC) has undertaken to provide a response toapplications within 72 hours without the need forthe more in-depth regulatory review of the PrivatePlacement Memorandum and promoters that isrequired under previous regimes.

The JFSC will do its own regulatory checks and,as they reserve the right to take remedial action ifthese checks prove to raise concerns, the onus ison the promoter and the designated serviceprovider to ensure that everything is in orderbefore making the application.

What advice would you offer to someoneseeking investment funds in Jersey?

At the risk of being accused of blatant self-promotion, I would always advise anyoneconsidering funds in Jersey to seek the advice ofone of the quality local service providers who willbe able to give sage and pertinent advice.

As stated above, there are numerous optionswithin the Jersey funds regime to cover nearly allfund requirements so, once a fund promoter isclear in their investment strategy and theirinvestor profile, the most suitable course of actionshould be readily identifiable.


As things stand it would be impossible to talkabout the Jersey funds industry or any fundrelated matters without mentioning theAlternative Investment Fund ManagementDirective (AIFMD) as this, like FATCA, will have asignificant effect on the funds industry as a whole.Whilst the final details are still being thrashedout, we in Jersey are very confident that Jerseywill be in a strong position to move forward whenit comes into force.

Every indication is that Jersey will be able toprovide fully AIFMD compliant structures for allthose who need them whilst still being able toprovide structures without the added costburdens that AIFMD requires for those structureswith no EU investors irrespective of which marketthey wish to invest into.

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QWhat can you tell us about the impact of the

Foreign Account Tax Compliance Act in

relation to Jersey funds?

Under the FATCA guidelines all payments of US

source income and capital to Foreign Financial

institutions (FFIs and Non-Financial Foreign

Entities (“NFFE”) will be subject to a withholding

tax penalty of 30% unless the institution or entity

concerned has entered into an agreement with the

IRS. The agreement will require the qualifying

entity to provide certain information on US

account holders and their transactions as well as

committing to applying the withholding tax to any

transfers on to non-compliant FFIs.

The impact of FATCA will be felt not only in Jersey

but globally as any operators wishing to deal with

any structure with US taxpayers as investors will

have to comply.

All institutions administering or managing

vehicles or accounts that fall under the terms of

FATCA will require strong procedures to identify

those with US connections, undertake due dili-

gence and collect the relevant information needed

to identify US tax payers whatever route they

may use to introduce capital into that vehicle. This

will require enhanced KYC and client review

procedures to ensure that the demands for

information by the IRS can be met to their

satisfaction.

I feel that FATCA is only one of many pressures on

administrators as, in recent years, there has been

a drive for closer scrutiny and greater attention to

FUNDSQ

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JERSEY

The impact of FATCA

will be felt not only in

Jersey but globally

Spotlight On...


For the most part, 2012 proved to be a difficult year for businesses

around the world, and the corporate financial landscape continues

to experience dramatic changes. Finance Monthly spoke to business

restructuring specialist and licensed insolvency practitioner,

Matthew Tait, a Partner at BDO LLP, who gave us his take on the

prevailing changes and his outlook for the future.

SPOTLIGHT ON...

INSOLVENCY

atthew Tait started his careerin restructuring some 20 yearsago, originally with a smallfirm specialising in personalinsolvency. Having moved to

a “big four” firm and then to BDO, he gainedextensive experience working with largercorporates and public sector clients in both theturnaround and insolvency spheres, includingworking in Belgium, Portugal and Isle of Man. Forthe last eight years, Matthew has been based inthe Kent, Surrey and Sussex region working withcorporates, banks, asset based lenders andinvestors.

How have on-going economic hardshipsimpacted insolvency & restructuring

practices?

We have had to adapt. Put simply, access togrowth capital has been and will continue tobe the greatest challenge facing businesses,particularly in increasingly competitive marketsfacing a period of no or low GDP growth,Europe-wide. Practices such as ours have toacknowledge this and develop their servicesaccordingly. The challenge becomes harder thesmaller the business is and this is borne out ininsolvency statistics, where insolvency remains atabove pre-2007 levels for small businesses, but ismore subdued for medium to larger businesses,

with the exception of the much publicisedproblems facing high street based retail.

This might appear to be encouraging news, but I,like many, believe that it is not. The fundamentalsof the recession were qualitatively different tothose in the recent past and have had a number ofvery different outcomes in terms of centralgovernment response, the ability of businessesto make necessary adjustments and, not least,the risk attitude or lending appetite of moretraditional funders to support recovery. Thedifficulties facing banks to keep lending in thisenvironment, when they themselves areembroiled in a number of high profile issues,reminds me of the Pushmi-Pullyu in Dr Doolittle.As business restructuring often sits in betweenthe business and lending communities, they havesimilarly felt the impact of these opposing forces.It is a generally agreed principle that businessrestructuring operates more effectively, in termsof creditor returns and stakeholder satisfaction,in a growth-orientated economy where capital isable to ebb and flow. Capital abhors a barrier, toparaphrase Marx.

Personally, I am not a fan of the phrase “zombiecompany”. In some ways it implies thatmanagement may not be doing all they can toimprove and grow. More critically, it can lead tothe assumption that nothing can or should be

done and that it will just “play out”. Needing toreact to these changes and then developing skills,processes and methodologies that addressbusiness and banking needs in this economy havebeen the biggest impact.

Of course, there have been a number of highprofile “traditional” insolvencies, and therealways will be; it is an unavoidable outcome of acapitalist economy. However, insolvency andrestructuring practices (particularly in the midmarket) have adapted and innovated, especiallyin terms of corporate side solutions and inunderstanding the needs of newer or more activeentrants into the sector, such as distressed equityinvestors and debt purchasers. We’ve seenevidence of this in the complexity of companyvoluntary arrangements, as well as the increasingnumber of solutions involving a mix of debtforgiveness and new approaches from asset basedlenders and venture capital.

Can you tell us more about the Insolvency &Restructuring services BDO LLP offer

and how you help companies that are strugglingfinancially?

BDO has one of the largest and most establishedrestructuring teams in the UK. We provide robustand expert advice to companies, lenders,creditors, directors, lawyers and other

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Matthew Tait, Partner at BDO LLP

RESTRUCTURINGUK

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Spotlight On...

Contact:

Matthew Tait

Partner

Phone: +44 (0) 1293 591 157


Web: www.bdo.uk.com

Larger businesses with the resources, globalreach and negotiating leverage will continue to dowell, albeit comparatively. As will those witha unique or niche market position, hi-techtelecommunications or natural resources, forexample. But those who lack the financial cloutand particularly those reliant on the consumerpound will continue to struggle. The obviousexamples are those located on an alreadyemptying high street. But there are others.

The care sector, with its dependence on acentralised funding model is open to furtherausterity-led cuts exacerbated by the pressure onpeople’s pockets. This sector may well see anincrease in the number of casualties. Many willbe caught in a trap of needing to increase capitaland revenue expenditure but without this beingmatched by the income streams they are able togenerate or the diminishing values of theunderlying property assets.

Small chains (maybe even larger chains) of hotelswill have similar problems stemming from thesame issue: the chasing down of the dwindlingconsumer pound from customers who will expectmore and will pay less. The construction andcontracting sector will most probably yo-yofrom positive to negative and back again. Thedomino effect of a larger failure in the chainof contractor-suppliers should not be underestimated. Many of the smaller and medium sizedcontracting businesses have survived througha combination of to-the-bone tenders andheadcount reductions. A position that isunsustainable without economic growth and thereturn of wealth-confidence. Personally, I don’tthink this will return this year, or the next.

Despite this rather gloomy backdrop, good qualitybusinesses can and do find market opportunitiesin difficult trading conditions. The winners will bethose who accept that the economy is not going tobounce back in the short-term and who, in thecontext of this new normal, take action. The keyto success in current markets appears to bearound the following principles: consumer value,client service, innovation and adaptability.

There has been a shift in the emphasis of

perceived consumer value, placing increased

importance on brand and customer perception

of branding. In the same way, quality of client

service, trust and commitment are critical to

financial performance as they are intrinsically

linked to client-perceived value, competitive

advantage and a target market focus.

Quality management information that

successfully monitors a business’ performance

remains integral to corporate stability and

longevity. The information should be accurate,

prepared and circulated on a timely basis, and,

most importantly, contain the information that

the management team needs to effectively run the

business. Frequently, management accounts are

prepared on the same basis for years with little or

no variation and often weeks after the end of the

period to which they relate. Management teams

should consider revamping their information by

assessing the financial and non-financial key

performance indicators, review the existing

preparation process and make it easy to identify

the issues easily.

In conjunction with meaningful management

information, a robust set of financial projections

are a fundamental tool when managing a

business. The purpose of projections is to enable

management to understand the impact of its

strategies as well as to provide a yardstick for

current performance.

There are opportunities for businesses across

every sector, but the importance of innovation

and rigorous financial management has never

been more evident. Tough though it may seem –

adapt, evolve or fail is the real challenge facing

businesses.

stakeholders. Financial difficulty can arisequickly and for a number of reasons. We workwith the company to understand the issues, offerswift and decisive advice to restore value andimprove the financial position of any troubledbusinesses.

But that’s what many would expect of us. Whatwe do is constantly innovate. We havemarket-leading offerings in defined benefitpension scheme restructuring and corporatesupport services. Corporate Support Servicesbrings together expertise from across BDO tohelp businesses deal with complex challengesassociated with unexpected change or stress.Our teams develop bespoke solutions forthe businesses we advise. We also have anew web-based refinancing offering,www.RefinanceYourBusiness.com, a service thatleverages our strong links with the asset basedlending industry.

Of course, in circumstances of acute financialdistress, a formal insolvency process may berequired. We are able to act as insolvency officeholders in all types of formal insolvencies toimmediately stabilise the situation and maximisevalue. Our dedicated contentious insolvency teamhave an excellent reputation for asset recoverythrough litigation.

Many of our cases have an international elementand the BDO Business Restructuring team hasestablished a network of relationships across theBDO International network which allows us toprovide advice across our 1,202 offices in 135countries. Like me, many of our partners havespent time working in other jurisdictions andhave a developed a strong understanding of theissues which arise when businesses in distressoperate in more than one country.

What is your outlook for the year?

2013 is going to be another difficult year. The listof negatives facing the economy is longer than thelist of positives. Even some of the positives, suchas falling employment, have a leaden lining, forexample under employment and reducing wages.

RESTRUCTURINGUK

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Spotlight On...


Pierre Kreemer is a Tax partner and the Head of Real Estate & Infrastructure at KPMG

Luxembourg. He has twenty years of experience in international tax planning and is a member

of both the Tax Committee of INREV (the European Association for Investors in the Non-listed

Real Estate Vehicles Industry) and the Association of the Luxembourg Fund Industry's (ALFI)

Strategy REIF (real estate investment funds) Working Group. Here he speaks about some of

the trends and challenges facing real estate and infrastructure investments in Luxembourg.

SPOTLIGHT ON...

REAL ESTATE &INFRASTRUCTURE

Can you give us an overview of the currentReal Estate & Infrastructure trends in your

jurisdiction?

Due to its political and financial stability, as wellas its flexible legal, regulatory and tax framework,Luxembourg is a traditional platform for theset-up of cross border investments in realproperties or infrastructure projects. Besidesclassical close-end real estate funds, we have seenin the recent years an increasing proportion ofvery large pension funds and sovereign wealthfunds using Luxembourg as a hub through whichthey operate internationally. The currentinvestment focus is rather on prime/coreproperties located in solid markets such as the UK,Germany, France, Poland and the Nordics.

More recently, many players have also been usingLuxembourg based vehicles to launch realestate (senior or distressed) debt funds. Manydifferent types of vehicles (SICAV, FCP, SICAR,securitization vehicles, soparfis, partnerships) areused in Luxembourg, which serve differentinvestors needs. Amongst the regulated vehicles,the Specialised Investment Fund (SIF), in itscontractual or corporate form, is a real successstory.

Based on the last ALFI Real Estate Fund Survey,the net assets under management for the soleregulated Luxembourg real estate funds(excluding funds of funds) amounted toapproximately EUR 25 billion in July 2012 (onlyEUR 8 billion in 2006).

What are some of the challenges facinginvestments in real estate and infrastructure

today?

There is a big funding gap in the real estatemarket, i.e. lending banks will most likely not bein a position to continue lending to the sameextent to all real estate funds, as some of themhave lost in value and obtaining financing atattractive conditions is very challenging. This

means a lot of restructuring operations will needto be carried out to allow such real estate fundsto refinance and continue operating. This alsoexplains the increasing success of debt funds, asan alternative to classic bank financing (realestate debt funds are also providing insurancecompanies with further investment opportunitiesin the light of Solvency II).

Tax efficiency is one of the drivers for the structureof real estate funds. As a result of the crisis, theglobal tax environment is changing and tax riskstend to increase, many countries having budgetdeficits are trying to increase their tax revenues indifferent ways.

The new EU Alternative Investment FundManagers Directive (AIFMD) expected to be inforce as from July 2013 will have a big impact onthe real estate fund industry and on the businessmodel for alternative fund managers. These newrules basically apply to any non UCITS investmentstructure having a pre-defined investment policywith more than one investor. As a consequence,many unregulated investment structures willbecome regulated. For those set-ups not exemptor grand-fathered, complying with those newregulatory requirements will necessarily meanincreased costs (in a context already verycompetitive) and administrative burden, a need toadapt existing operating models, restructure, andcertainly many tax consequences.

How can these challenges be eased orovercome in 2013?

Luxembourg is well positioned as a longstandingreputable financial sector, with diversifiedregulated investment vehicles ensuring investorprotection and supervised by the CSSF. I expectfor restructuring transactions to be facilitatedbased on the current flexible legal, regulatory andtax environment in Luxembourg. True substancefor Luxembourg set-ups should also supportthe management of global tax risks. The wellestablished UCITS regulation experience, related

processes and industry players in Luxembourgshould also enormously facilitate the AIFMDtransition for Luxembourg.

New investment vehicles answering marketsneeds are likely to be adopted soon, such as thenew limited partnership (“societe en commanditespeciale”), as an effort to complete an already welldiversified range of fund vehicles.

In what ways can KPMG serve investors inthese sectors?

KPMG provides a diversified and global serviceoffering, covering audit, tax, advisory andaccounting. We understand the complexity andchallenges of operating an international businessand have built a credible expertise in the tax /AIFMD / regulatory fields. Quality is also a key leit-motiv for our audits. Our teams are stable andtechnically very strong, and we have an integratedapproach to the market. We have recentlylaunched a corporate health check program,which also applies to real estate and infrastructureclients.


Many economists share the view that inflation islikely to be expected in a near future, perhaps as amean for countries to reduce their deficits andindebtedness. The Property asset class is oftenseen as a refuge against inflation and from thatpoint of view, given the specific features andstrong points of Luxembourg as mentioned above,I believe that the real estate and infrastructurefund industry in Luxembourg has a very positivefuture.

Pierre Kreemer, KPMG Luxembourg

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Contact:KPMG Luxembourg

Pierre Kreemer

Partner,

Head of Real Estate & Infrastructure

Tel: +352 22 51 51 5502


Website: www.kpmg.lu

Spotlight On...

Pierre Kreemer, KPMG LuxembourgSP

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PRICINGECONOMIC CRISES

DURING

Contact:Piergiorgio Valente

Managing Partner

Valente Associati GEB Partners

Viale Bianca Maria, 45

20122 Milan, Italy

Tel: +39 02 7626131

Fax: +39 02 76001091


Website: www.gebpartners.it

For multinational groups, economic crises are not ordinary events but areextraordinary circumstances capable of negatively affecting business activities andthe business organization itself and therefore require specific interventions.

ccordingly, companies’transfer pricing policies mustbe modified and adjusted tonew economic scenarios so thatthe arm's length principlerequired by the OECD TransferPricing Guidelines is respected.

"Survival" during recessions often requireschanges in the companies’ business strategies,which can result in a review of pricing strategies,localization of subsidiaries, costs structure,and intercompany agreements; and a properbusiness restructuring with consequences ontaxation and transfer pricing policies.

With respect to transfer pricing, duringeconomic recessions it is necessary to:

• Ensure compliance with the arm's lengthprinciple;

• Evaluate the applicability of transfer pricingmethods selected before the recession;

• Provide documentation illustrating the“special circumstances that can makedeviations from normal transfer pricingpolicies permissible in some jurisdictions”;

• Ensure that intragroup arrangements areupdated so as to reflect the new economiccircumstances and are flexible enough “torespond to a downturn by adjusting margins”;

• Review the benchmarking analysisprocedures;

• Analyze the financial forecasts carried outbefore the recession in order “to calculate thedirect impact of lower sales on profitability”.

In the context of transfer pricing, the applicationof the arm’s length principle is based on thecomparison between transfer prices applied totransactions between related companies andthose applied by independent parties in similarconditions. The OECD Transfer PricingGuidelines identify the following comparabilityfactors: characteristics of goods and services;functional analysis; contractual terms; businessstrategies; and economic circumstances.

Consistently with the standard for selection andapplication of pricing methods based on thechoice of the “most appropriate method to thecircumstances of the case”, it is a good practiceto carry out comparability analyses in support ofthe transfer pricing policy adopted.

During recessions, carrying out comparabilityanalyses and identifying comparabletransactions is more complex due to the lack ofsuitable comparables and the so-called “twoyears lag” between the closing of the fiscal yearand the time when data is publicly available incorporate databases.

To make comparability analyses consistent withthe new economic conditions, companies canadopt the following strategies to identifycomparables:

• Inclusion, for the determination of the “truearm's length price”, in the set of comparablesof companies that generate losses (since theyreflect actual market conditions);

• Selection of an appropriate time period.Choosing a time period of three years (periodconventionally considered as reference in thesearch for comparables) may not beappropriate during recessions; alternatively,one could use comparable data referring toprevious recessions in order to determine thereduction of profits in times of crisis.

Economic crises also have effects on the so-calledAdvance Pricing Agreements between taxpayersand Tax Authorities, which last on averagethree to five years and according to which thecriteria and technical procedures leading to thedetermination of transfer prices must beidentified before carrying out intercompanytransactions.

During economic crises, multinationalcompanies may not be able to respect theseagreements since they were executed on thebasis of different market conditions. Therefore,it may be necessary to review the assumptionslaid down in the Advance Pricing Agreements in

order to evaluate their validity and the possibilityof terminating agreements that might provecostly.

A recession could push taxpayers to enter inAdvance Pricing Agreements in order to avoiddisputes with Tax Authorities and to agree tospecific “critical assumptions” which make itpossible to modify already executed APAs orswitch from a transfer pricing method toanother.

A recession may also significantly affect financialsector transactions. The economic crisis createsa lack of liquidity and makes external financinglimited and difficult to access. As a result,multinational companies are increasinglyturning to cash pooling techniques in orderto optimize and rationalize their financialmanagement.

Intragroup financing is considered to be at arm'slength if the interest rate applied to it is thesame as that which would have been applied totransactions between independent entities.When financial markets are stable, determiningthe arm's length interest rate may be quitesimple. However, it may be complex to do so intimes of financial turmoil as benchmark ratesdecrease.

Finally, economic recessions also affect TaxAuthorities as they register reduced incomedue to the collapse of the taxable base ofmultinational companies. As a result, TaxAuthorities tend to increase the frequency of taxaudits, focusing on transfer pricing cases andrequiring taxpayers to meet increasingobligations (especially in terms of transferpricing documentation) and implementing newtax audit strategies.

A

Piergiorgio Valente, Managing Partner of Valente Associati GEB Partners

Spotlight On...


“A trust is an arrangement by which property is transferred from one person, known as the settlor,to another person or corporate body, the trustee, to hold the property for the benefit of a specifiedlist or class of persons – the beneficiaries. A trust may be created by will or in lifetime in which

case assets are transferred during a person’s lifetime rather than upon death.” John Hanafin of SovereignCorporate Services JLT spoke to Finance Monthly about the benefits of trust services.

SPOTLIGHT ON...

TRUSTS &Contact:John Hanafin

Sovereign Corporate Services JLT

Suite 801, Reef Tower

Jumeirah Lake Towers

Dubai, United Arab Emirates

Tel: +971 4 448 6010

Fax: +971 4 448 6011


www.SovereignGroup.com

John Hanafin, Sovereign Corporate Services JLT

PROPERTY

The content of this article is intended to provide a general guide to the subject matter and does not constitute anyform of advice whether legal or otherwise.

What advantages do Trusts offer?

For legal purposes the trustee is recognised as theowner of the assets rather than the settlor or thebeneficiaries. Onshore clients could thereforemitigate income, capital gains, wealth andinheritance taxes in their country of residence bytransferring assets to trustees located in anoffshore jurisdiction. These options have recentlybeen much eroded by anti-avoidance legislation,but may still apply for settlors changing theirdomicile, residence or citizenship, or whosefamilies are resident abroad.

But even without any tax benefits, trusts are auseful estate planning vehicle. Transferring allsubstantive assets and wealth into a trust orequivalent structure will ensure the smooth andtimely transition of family wealth because settlorsare able to oversee the transition during theirlifetime and the trust arrangements will continueafter their death.

Trusts are particularly effective for those seekingto:

• Gain enhanced asset protection provided assetsare not transferred into trust with the intentionof avoiding a current or future liability;

• Avoid lengthy and expensive probateprocedures that generally involve a minimumof 12 months and cost up to 6% of the total valueof the estate (more so if assets are held acrossseveral countries);

• Gain increased confidentiality because trustdeeds, unlike wills, are not public documents;

• Make complex arrangements for thedistribution of assets, such as providing incomefor a spouse or for educating children;

• Preserve family assets against mismanagementor spendthrifts;

• Avoid forced heirship rules in civil or Shariahlaw jurisdictions, or similar claims undercommon law principles;

• Protect the weak by providing for infants, theinfirm or the aged;

• Continue a family business where familymembers lack experience or inclination.

What are the advantages of a Trust owning aproperty?

The advantages are the same as with other trustproperty; the protection or preservation ofassets, avoiding succession problems and estateplanning opportunities. However, a portfolio ofinternational properties can be held under a singletrust. It may be advisable and is common for eachproperty to be held by a single holding companyand in some circumstances that has to be a “localcompany” which sits under the trust. For examplea Jebel Ali Offshore company has to be used tohold Dubai property and the trustee can act asshareholder of that company. The properties arethen segregated from each other, so there is nocrossover of liability, but they can then be enjoyed,managed or disposed of either together orseparately. Trusts offer a lot of flexibility.

Will the individual lose control of theirassets?

When you transfer your assets to a trust, you nolonger own these assets personally and decisionsabout them will need to be made by the trustees inaccordance with the terms of the trust deed. Manypotential settlors are quite naturally wary of losingcontrol of the assets. By using private trustcompanies, foundations, family investmentcompanies, as well as traditional trusts, we cancreate structures that enable clients to fulfil theirdynastic objectives and retain an acceptabledegree of influence during their lifetime.

Do trusts have any commercial uses?

The lack of rigid formal requirements for thecreation and operation of trusts, unlike

companies, and the tremendous flexibility of trust

instruments make them a useful vehicle for many

commercial purposes. Trusts have long been used

in the context of pension funds, unit trusts or

employee benefit structures and are a core

element of many other commercial arrangements.

About Sovereign GroupSovereign Group’s core business is setting up and

managing companies, trusts and other compliant

structures to meet the specific personal or

business needs of its clients. Typically these

would include tax planning, wealth management,

succession planning, foreign property ownership

and facilitating cross-border business.

Sovereign Corporate Services JLT has been

licensed in Dubai since 1998 and is now one of the

largest corporate services providers operating in

the Middle East. We are a registered agent for the

free zones of Dubai, including Ras Al Khaimah

(RAK) and Jebel Ali and have further expanded

our presence in the Gulf States by opening offices

in Bahrain and Abu Dhabi.

The first Sovereign office opened in Gibraltar in

1987 and the Group now has offices in over 25

international finance centres worldwide. We work

with public companies, charities and professional

law and accountancy firms, but the majority of

our clients are individuals – expatriates,

entrepreneurs, consultants, private investors and

high net worth individuals and their families.

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TRUSTS &John Hanafin, Sovereign Corporate Services JLT

SPOTLIGHT ON...

WOMEN INFINANCE

Contact:ALISON SEYMOUR

Senior Consultant

Tel: 00 44 (0) 207 893 2277


Website: www.broadstoneltd.co.uk

In our December 2012 edition, Lucy Money asked “How many women are on your

board?” following the publishing of draft regulations from the Department of Business,

Innovation and Skills that intended to put pressure on companies to increase the number

of women occupying senior roles. To follow up on this important subject, Finance Monthly

spoke to Alison Seymour of Broadstone Pensions & Investments Limited to get a first

hand perspective on gender in the financial industry.

Can you tell us a little about yourprofessional background and your firm?

I am an independent financial adviser and havebeen working in the financial services sector foralmost 23 years with the same firm, BroadstonePensions & Investments Limited (formerlyBDO Investment Management). We are a firm ofchartered financial planners, used to working withaccountants, solicitors and private clients.

Can you tell us more about your currentposition at BROADSTONE?

My role is to carry out financial planning forindividuals and, where appropriate, providesuitable advice to meet shortfalls and gaps thatare identified through this process. My primaryobjective is to help clients achieve their futurefinancial goals. In addition to meeting with newclients, I look after my existing clients anddevelop business relationships with otherprofessional firms.

In the 22 years that you’ve worked in thefinancial service industry, how have things

changed in regard to gender and the workplace?

The very fact that diversity and women in theworkplace are topical issues demonstrateschange. I feel that a contributing factor tothis change has been greater flexibility in theworkplace, encouraging the ethos that peoples’performances are judged on their output ratherthan their ability to be able to sit at a particulardesk every day. This, I think, has made theprofession more ‘reachable’ to women. Inaddition, the paraplanner role has increasedsignificantly over the last few years and thishas helped to open more routes for careerprogression and for finance to be moreappealing as a career choice.

What do think are the main issues facing

women in industry?

Still, even after almost 23 years, I think that this is

a very male dominated industry. You only have to

look around the presentations and seminars for

proof of that - unless, of course, it is only the men

who like to lunch! On a serious note, though, some

of the main issues may be:

• Being taken seriously – although this has

improved and generally I think we are being

taken more seriously than previously.

• Promoting ourselves - females are generally

not as good at ‘self promotion’ as male

colleagues so can be left behind – we need to be

‘out there’ more, letting people know what we

are good at. This means sometimes that we

have to take risks and I think that generally

women are more cautious. It may well be that

we tend to be like this because if we get it

wrong, the tutting of “well she is a woman”

rings in the ears.

• Support – possibly we don’t support each

other enough - we have all worked hard to get

where we are and want to make sure that we

stay here. Women can be fiercely competitive,

but do we help one another as much as we

could?

• We sometimes have to work harder to prove

ourselves.

Recently drafted regulations are aiming toput pressure on companies to increase the

number of women occupying senior roles. Do youthink this is a positive step?

Yes, maybe and no and yes! Yes - because thereare probably many suitable women for seniorroles; they are just hidden by the number of maleapplicants. Maybe – because of consideration ofthe employer point of view as it is difficult todefine ‘gender split’ when looking for the ‘rightperson’ for a role. Within this company when jobopportunities for consultant roles are advertisedthere are generally far more men looking for rolesthan women. No and Yes! – because it couldpotentially work against women in the workplaceas companies would be forced to take us onalthough they would then hopefully see the skillsand attributes that we can bring to a firm.

Do you have any final thoughts?

I think that it is so important to recognise the valuethat women can add and, ultimately, it shouldall be about consumer choice. It needs to berecognised that there are circumstances wherewomen requiring advice may find it easier tospeak with a woman adviser about particularissues, such as where advice is required in adivorce, just as a man may prefer to speak toanother man. Here at BROADSTONE there arethree female financial advisers and we haveover 50 years’ experience between us. Wemeet regularly to share our knowledge andexperiences in order to support one another andto raise the profile of women in finance.

Alison Seymour, BROADSTONE

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LockerDome Closes $6 Million in Series AFunding

NameLockerDome

TargetThis additional capital willbe used to support ourexplosive growth andcontinued penetration ofthe sports market.

InvestorsCultivation Capital GrowthFund

FUNDSports social media-publishing platform, LockerDome recentlyannounced significant fundraising and traffic milestones. TheSt. Louis-based platform has completed a $6 million Series Afunding round.

INVESTORThe funding was led by Cultivation Capital Growth Fund, anewly formed venture fund spearheaded by Square co-founderJim McKelvey, among others. Additional participants includethe St. Louis Cardinals President and part-owner WilliamDeWitt III, 5-time NHL All-Star and Hart Trophy winner ChrisPronger, and a member of the Milwaukee Brewers ownershipgroup, among a number of undisclosed parties.

TARGETGabe Lozano, co-founder and CEO of LockerDome expressed"This additional capital will be used to support our explosivegrowth and continued penetration of the sports market."

THE COMPANYLockerDome is a social media platform for your sports life.More than 10 million people - athletes, fans, parents, andcoaches - use LockerDome to consume content and interactwith like-minded people around their favorite sports interests.LockerDome has approved 1,500 of the top sports brands inthe country to launch their own LockerDome networks, whichserve as interest-specific communities within LockerDomearound their brands; this list includes celebrity athletes, mediapersonalities, media companies, corporate brands andamateur sports programs. Learn more at lockerdome.com.

TauRx Pharmaceuticals Receives $10.5mFollow-On Investment

NameTauRx Pharmaceuticals

Targetsupport the on-goingprogram of three Phase3 clinical trials of LMTX™

InvestorsDundee Corporation ofToronto

FUNDTauRx Pharmaceuticals Ltd. recently announced thereceipt of an equity investment of US$10.5m.

INVESTORThe investment from Dundee Corporation of Torontofollowed an initial investment of US$20m in TauRx inSeptember 2011.

TARGETThe investment will be used by TauRx primarily to supportthe on-going program of three Phase 3 clinical trials ofLMTX™, its novel compound currently in development as

a disease-modifying treatment for Alzheimer's Disease andbehavioral-variant Fronto-Temporal Dementia.

THE COMPANYTauRx Therapeutics Ltd was established in Singapore in2002 with the aim of developing new treatments anddiagnostics for a range of neurodegenerative diseasesbased on an entirely new approach which targetsaggregates of abnormal fibers of Tau protein that forminside nerve cells in the brain. The TauRx team have sincediscovered that LMTX™ could also have beneficial effectsin several other neurodegenerative diseases associatedwith Tau pathology, as well as other protein aggregationdisorders including Parkinson's, Huntington's andFrontotemporol Dementia.

Appcore Secures $6 Million Series B FundingRound

NameAppcore

TargetContinue global expansion ofits local cloud deploymentsas well as continueddevelopment of Appcore’sindustry leading softwaredefined cloud and softwaredefined data center offerings

InvestorsTelephone AcquisitionCompany

FUNDAppcore recently announced the closing of a $6 millionSeries B funding round.

INVESTORThis Series B funding included private investors as well asexisting investor Telephone Acquisition Company.

TARGETThe company will use the proceeds of this funding tocontinue global expansion of its local cloud deployments,as well as continued development of Appcore's industryleading software defined cloud and software defined datacenter offerings.

THE COMPANYAppcore® automates the business of cloud computing®.Appcore delivers local cloud infrastructure for EnterprisePrivate Clouds and Service Provider Public Clouds.Appcore Onsite™ is a converged platform of automation,appstore, administration and architecture designed to beroll-in ready, accelerating the deployment and automatingthe operations of cloud environments. Appcore simplifiesthe complexity of cloud technology for data centers, telcos,software vendors and enterprises with flexible and scalablebest practice solutions, backed by end- to-endmanagement and support.

Funds

Saladax Biomedical Receives $22.4 MillionInvestment

NameSaladax Biomedical

Targetsupport ongoing clinicaldevelopment efforts that willlead to the expansion of theMyCare product line, aswell as support thecommercialization of thecompany's current portfolioof MyCare assays.

InvestorsShanghai FosunPharmaceutical Co., Ltd

FUNDPrivately held company, Saladax Biomedical, Inc.has received a $22.4 million strategic equityinvestment.

INVESTORThe investment came from Shanghai FosunPharmaceutical Co., Ltd., a leading pharmaceuticaland healthcare company in the People's Republicof China.

TARGETSaladax will utilize the funds from this equityinvestment to support ongoing clinical development

efforts that will lead to the expansion of theMyCare product line, as well as support thecommercialization of the company's current portfolioof MyCare assays.

THE COMPANYSaladax Biomedical, founded in 2004 developsnovel diagnostic assays for the practical delivery ofpersonalized medicine. Their proprietary line ofMyCare™ assays improves the efficacy of existingdrugs by optimizing the dose administered for eachindividual patient. Saladax's initial focus isoncology, with a portfolio of 13 chemotherapy drugassays in various stages of development.

PTC Therapeutics Closes $60 Million PrivateFinancing

NamePTC Therapeutics

TargetProceeds from this financingwill support continued clinicaldevelopment of ataluren inDuchenne muscular dystrophyand cystic fibrosis.

InvestorsBrookside Capital PartnersFund L.P., Adage CapitalManagement, JennisonAssociates L.L.C. andLongwood Fund

FUNDPTC Therapeutics, Inc. recently announced the successfulcompletion of a $60 million financing.

INVESTORThe financing was led by Brookside Capital Partners Fund, L.Pand also included new investors Adage Capital Management,Jennison Associates L.L.C. (on behalf of fund clients),Longwood Fund and additional top-tier institutional investors.

TARGETChairman of the Board, Michael Schmertzle, stated: “Thissubstantial financing enables PTC to continue to pursuethe regulatory approval and delivery of ataluren topatients,". Proceeds from this financing will support

continued clinical development of ataluren in Duchennemuscular dystrophy and cystic fibrosis.

THE COMPANYPTC is a biopharmaceutical company focused on thediscovery, development and commercialization of orallyadministered, proprietary small-molecule drugs that targetpost-transcriptional control processes. Post-transcriptionalcontrol processes regulate the rate and timing of proteinproduction and are of central importance to proper cellularfunction. PTC's internally discovered pipeline addressesmultiple therapeutic areas, including rare genetic disorders,oncology and infectious diseases. PTC has developedproprietary technologies that it applies in its drug discoveryactivities and that have served as the basis for collaborationswith leading biopharmaceutical companies. For moreinformation, visit the company's website at www.ptcbio.com.

Crittercism Raises $12 Million in Funding

NameCrittercism

TargetBuilding a comprehensivemobile performancemanagement solution

InvestorsGoogle Ventures, ShastaVentures and Opus Capital

FUNDCrittercism, a pioneer in Mobile Performance Managementthat helps leading brands excel in the mobile app economy,recently announced that it had raised $12 million in SeriesB funding.

INVESTORThe funding round was led by existing investor GoogleVentures and also included Shasta Ventures and OpusCapital, also existing investors in the company.

TARGETCrittercism co-founder and CEO, Andrew Levy, stated“We’re excited to bring together some of the most talentedinvestors and advisors in technology to support our mission

of building a comprehensive mobile performancemanagement solution,”

THE COMPANYCrittercism, based in San Francisco, California, is theworld's first mobile application performance management(APM) solution and sits at the center of the global shift tothe new app economy. Crittercism products monitor everyaspect of mobile app performance, allowing Developersand IT Operations to deliver high performing, highlyreliable, highly available mobile apps. Crittercism offers areal-time global view of app diagnostics and app crashesacross iOS, Android, Windows Phone 8, Hybrid andHTML5 apps used on more than 450 million unique devicesand in more than 50 billion app sessions.

Advisor of the Month



Salah Dakhlaoui

The Qatar-based Qtel group

recently acquired a 15% stake in

mobile operator Tunisiana from

the Government of Tunisia. We

spoke to Salah Dakhlaoui, of

Dakhlaoui Avocats, about his

involvement in the deal, his

previous work and his extensive

experience.

Salah Dakhlaoui is a practicing Partner at

Dakhlaoui Avocats, having previously spent

six years at French law firm Gide Loyrette

Noel gaining extensive experience in the legal

areas of mergers and acquisitions, as well as

the banking and financial sector. He has

advised the Tunisian Government and

both domestic and foreign investors on

privatization of certain deals in the country.

He also works as an external counselor for

several leading Tunisian and foreign

merchant banks, investment funds and

insurance companies.

Please tell us a little more about

your firm

Dakhlaoui Avocats is a business-orientated

law firm which offers a high standard of legal

advice and assistance to both Tunisian and

international companies, and public and

private institutions across a wide range of

practice areas. The firm’s seven lawyers, led

by myself, provide clients with their extensive

expertise in the local market and assist them

in their international development and with

sorts of financial transactions. The majority of

Advisor Insight

Dakhlaoui Avocats’ clients are international

organizations.

Areas of the firm’s expertise include: mergers

and acquisitions, corporate law, privatization,

investment and exchange control regulation,

finance and banking, capital markets,

insurance, arbitration and litigation,

employment, economic law, intellectual

property, taxation and real estate.

Please tell us more about your

involvement in the Qtel/Tunisiana

transaction

As Managing Partner, with the collaboration

of Bird & Bird Law Firm, I advised The

Tunisian Government on their 25% transfer

of the capital of Tunisiana Co, carrying out

legal due diligence of Tunisiana and assisting

Government officials in the preparation of

tender documents, the organization of Dated

Room and the negotiation and the drafting of

legal documents, including the sale and

purchase agreement and shareholders

agreement, whilst drafting several

consultations on the general legal framework

of the transaction.

With the tender being declared unfruitful, I

negotiated, on behalf of the Tunisian

Government, an agreement with Qtel, the

majority shareholder of Tunisiana, to allow

the sale of 15% of Tunisiana’s capital, with the

remaining 10% being introduced to the Tunis

Stock Exchange.

The Deal

Qatar Telecom IncreasesStake in Tunisiana

The Qatar-based Qtel group has recentlyacquired a 15% stake in mobile operatorTunisiana from the government of Tunisia.

The deal takes Qtel’s total stake in thecompany — directly and via subsidiaries —to 90%. The other 10% is still held by theTunisian government, though there is adecision of a public offering of thoseshares.

Qtel Chairman Sheikh Abdullah binMohamed bin Saud al-Thani said: “Weare pleased to have been offered theopportunity to further increase ourshareholding in Tunisiana, an outstandingcompany which we believe will continueto deliver long term value for ourshareholders.”

Tunisiana was set up in 2002 by Egyptianoperator Orascom. Qtel’s Wataniyasubsidiary took a 75% stake in early 2011.Before the latest deal Wataniya, owned92.1% by Qtel, had a direct holding of 75%in Tunisiana.

Al-Thani commented: “We also lookforward to continuing our partnership withthe Tunisian authorities as Tunisiana entersinto a new phase of its development withthe continuing expansion of 3G servicesand the launch of fixed line services in2013. We are convinced that these newservices will enhance the experience ofTunisiana’s customers and will contribute togrowth in Tunisia’s economy.”

Q

Managing Partner at Dakhlaoui Avocats

Q


alah Dakhlaoui

Advisor Insight

Did the fact that you were dealing

with a government body have any

substantial impact on the process?

Dakhlaoui Avocats enjoys a long-standing

working relationship with the Tunisian

Government, acting on a range of complex

legal matters, including the privatization of

the Tunisian-Kuwaiti and French-Tunisian

banks, and the opening up of the capital of

Tunisia Telecom.

What other projects have you

worked on recently?

We have recently advised German group Dr.

Oetker, a global leader in the agro-food sector,

on a potential partnership with a Tunisian

group, and are currently working with two

Tunisian groups on international arbitrations

with multinational corporations. We are also

advising The English Bank, Standard Charted

Bank, on proceeding for the recovery of claims

in Tunisia for an approximate US$25m debt.

In addition, we are providing expertise to a

major insurance company to establish a joint

venture in the management of health claims.

Is there anything else you would

like to add?

Dakhlaoui Avocats have recently entered into

an agreement with international law firm Bird

& Bird. This partnership allows both firms to

establish joint teams with the intention of

combining the former’s knowledge of the local

legal market with the latter’s international

expertise, confirming the will of Dakhlaoui

Avocats to grow and position itself in the

MENA region. With this partnership we aim

to strengthen the activities of the firm not only

in Tunisia, but also in Libya.

Salah Dakhlaoui is a founding partner in

Dakhlaoui Avocats after an experience of six

years with the French law firm Gide Loyrette

Nouel.

Salah Dakhlaoui has a triple experience in

the field of mergers and acquisitions in the

financial sector and banking operations. He

has also advised the Tunisian Government

and both foreign and Tunsian investors with

respect to privatization operations.

In addition, Salah Dakhlaoui is actively

involved as an external consultant to a

number of banks and investment funds in

Tunisia and abroad.

Salah has a Master degree in political science

and Bachelor degree in judiciary law from the

Faculty of Law and Political Sciences of Tunis,

Salah is a lawyer practicing in Tunis.

Q

Qatar Telecom (Qtel) increases stake in TunisianaLegal advisors to Tunisia government:

Dakhlaoui Avocats enjoys a long-standing working

relationship with the Tunisian Government, acting on

a range of complex legal matters, including the

privatization of the Tunisian-Kuwaiti and

French-Tunisian banks, and the opening up of the

capital of Tunisia Telecom.

Q

Q

More on Salah Dakhlaoui




Lee Kin Hing

OGIL, which belongs to the Vantage group, issuednotes in the US. Azmi & Associates represented twoVantage corporate entities in Malaysia. TheMalaysian entities as well as other Vantagecorporate entities acted as the guarantors in theindenture exercise and provided the necessarycollaterals to secure OGIL’s payment obligationunder the indentures. Lee and his team advisedVantage Malaysian entities in the legaldocumentation to be entered into and governedunder the laws of Malaysia for the purpose ofcreating security over the shares and revenueaccounts of the entities in favour of the noteholderscollateral agent.

Lee and his team advised Vantage on theproposed documentation structure, approvals,resolutions, company and directors’ certificatesand legal opinions required for provision of validand enforceable collaterals. Lee and his teamworked with local counterparts in agreeing andfinalising the above to achieve closing of thetransaction.

What were the main challenges that arose foryou in this deal, and how did you overcome

them?

The indenture is a US bond structure and we haveto have some basic knowledge of the structurein order for us to prepare the necessary legal

documentation under our respective jurisdictions.Our team was required to obtain the necessaryregulatory clearance with the Foreign ExchangeController, Central Bank of Malaysia within a shorttimeline without full information being madeavailable to us at the initial stage.

The foreign law-governed agreements to which theMalaysian entities were parties would still require ourthorough reviews as to whether the obligationsimposed on the Malaysian entities were legal anddid not breach any laws or regulations of Malaysia.

Issues also arose when additional creditors werebrought into the picture under different legalagreements and structures. Our team advised onthe legal possibility for a second legal charge anda second assignment to be created over the samecollaterals under the laws of Malaysia on which thelegal position was not immediately straightforward.The documentation must further implement andnot be in conflict with the controlling IntercreditorsAgreement which leads the overall security sharingarrangement between all secured parties.

The legal possibility of immediate recognition andenforcement of judgments of New York courts inMalaysia was also actively debated between usand our local counterpart due to the lack of directreciprocal arrangements between Malaysia andUS.

Deal Insight

Contact:Lee Kin Hing, Senior Associate

Azmi & Associates, 14th Floor,

Menara Keck Seng, 203, Jalan Bukit Bintang,

55100 Kuala Lumpur, Malaysia.

Tel: 603-2118 5000 Fax: 603-2145 7171


Website: www.azmilaw.com

Senior Associate of Project Finance and CorporateCommercial, Azmi & Associates

Current Projects…Lee is currently acting for a Malaysian bankinginstitution on developing a cross-border financingproduct and structure for the purpose of providingdomestic credit facilities to non-UK residentMalaysians for acquiring properties in the UK inparticular London.

The project requires legal inputs from lawyers in bothMalaysia and England to address issues such asregulatory compliance, different governing lawsapplying to principal loan and security agreementsrespectively, effectiveness of the security taken andenforcement routes in the event of loan repaymentdefault.

It is overall an interesting and timely project in light ofthe Malaysian consortium’s investment in theBattersea Power Station development in CentralLondon with sales launched in the UK as well as inother countries including Malaysia.

Q

Local counsel to Vantage Drilling Company in the Securing of $1.15bn Investment

Lee Kin HingLee graduated with an LLB (Hons) from AngliaRuskin University in Chelmsford, Essex, UK in 2000.Thereafter Lee worked as an England’s Law Societyand Community Legal Services jointly-accreditedrefugee, immigration and nationality legal adviserand advocate in London for almost 8 years,providing legal aid support and representation todisadvantaged groups of new arrivals in the UK.

Following his completion of the Bar VocationalCourse in London, Lee was called to the English Barand is a member of the Honourable Society ofGray’s Inn. He also holds an LLM in ProfessionalLegal Practice.

Upon his return to Malaysia in 2009, Lee underwenta substantial change of legal practice fromcommunity to corporate commercial fields. Hejoined Azmi & Associates as a trainee and has beenworking directly under the firm’s Senior Partner,

Dato’ Azmi Mohd Ali. Lee has undertaken variousassignments including cross-border banking andfinance, project finance, oil and gas, joint venture,foreign investment and compliance, concessionadvisory and disputes resolution, due diligenceexercises for assets and shares acquisitions,construction defects disputes, employmentlaw compliance and disputes resolution andaccounting fraud.

Applying his past litigation experience gained in theUK, Lee is also actively involved in corporatecommercial litigation ranging from shareholdersdisputes, minority oppression, derivative action,companies liquidation to ultimate board takeoverby way of directors appointment and removal, andemployment law claims. In this regard, Lee hasworked closely with his firm’s litigation departmentby providing legal and strategy analysis, alternativeresolution routes and settlement negotiation.

Transaction Reports


TRANSACTIONREPORTS

Mergers & AcquisitionsCGA Mining .................................................57

Gecamines ..................................................57

Griffin Power ..............................................58

Helvea Holding SA ..........................................58

Hertie Building ............................................59

Lifestyle Entertainment Business ...........................60

Mountain Cablevision .......................................61

Spear Group ................................................63

Initial Public OfferingNorwegian Cruise Lines .....................................62

Transaction Reports

Funds & InvestmentsAnTech Limited .............................................56

HS1 ........................................................59

ICG-Longbow SSUP ...........................................60

Mapletree Greater China Commercial Trust ...................61

Smarter Grid Solutions .....................................62

Vietnam Airlines ...........................................64

Yuexiu Property ............................................64

Joint VenturesBurger King...................................................56

Solunion......................................................63

Transaction Reports


AnTech Limited

Calculus Capital has invested £2.15million in a long established oil servicescompany AnTech Limited. Founded in1994, AnTech is a specialist engineeringdesign and manufacturing companyproviding a range of electro-mechanicalproducts to the upstream oil and gasindustry.

Carlton Strategy Advisors supported CalculusCapital by providing full-scope commercial duediligence in connection with its private equityinvestment in AnTech Ltd.

David McClelland, Director, led the commercialdue diligence. A key feature of the diligenceundertaken by CSA was in connection with thetiming that could be anticipated for earlycommercial traction by customers adoptingAnTech’s Coiled Tubing Drilling toolingtechnology, namely its range of COLTTM and

POLARISTM branded CTD tools, particularly inthe North American hydrocarbon extractionindustries.

The commercial due diligence reported oncompany competitive positioning; assessingAnTech as a business which, according to CSA’sinterpretation, could develop its Colt andPolaris based services as a commercialproposition over the next five years.

AnTech’s bottom-hole tool assemblies aidthe accuracy of precision horizontal andmultilateral directional drilling; techniques thatfind application, for example, in brown-field ormarginal reservoirs where easier drilling accessimproves the economics of re-entry work andthusly old or abandoned wells to be rejuvenated.It also facilitates drilling in narrow reservoirstreams, such as may be typical of coal bedmethane.

CSA Supports Calculus Capital withCommercial Due Diligence on itsInvestment in AnTech Limited

Burger King

Burger King Worldwide, Inc. recentlyannounced that it had entered into amulti-country, Master Franchise JointVenture Agreement with BEBOCA LTDin Central America, the first of itskind for the BURGER KING® brand,worldwide.

Under the terms of the agreement, BurgerKing Worldwide and BEBOCA LTD, along-standing BURGER KING® franchisee,which currently owns and operates 48restaurants in Costa Rica and Panama, willestablish a new entity named BK CentroAmerica. The new joint venture will acquirethe master franchise rights for the 178restaurants in Costa Rica, El Salvador,Guatemala, Honduras, Nicaragua and Panama

and has committed to manage the aggressivedevelopment of the BURGER KING® brandin these countries. The company will provideoperations, supply chain, procurement andmarketing for franchisees in Central Americaand will have new development exclusivity inthese markets.

Founded in 1954, BURGER KING® is thesecond largest fast food hamburger chain inthe world operating in over 12,600 locationsserving over 11 million guests daily in 83countries and territories worldwide.Approximately 95% of BURGER KING®restaurants are owned and operated byindependent franchisees, many of themfamily-owned operations that have been inbusiness for decades.

Burger King in Joint VentureAgreement with Beboca

Calculus Capitalinvestment in

AnTech Limited

Commercial due diligence provider:

Burger King in jointventure agreement

with Beboca

Legal advisors:

Transaction Reports

CGA Mining

B2Gold recently announced thesuccessful acquisition of all issuedordinary shares of CGA Mining Limited,including the 251,973,927 shares issuedas consideration under the deal for theformer share and option holders ofCGA, totaling 645,383,200 sharesissued and outstanding.

Former Director, President and CEO of CGAMining Limited, Michael Carrick, has beenappointed to the board of directors of B2Goldwith the existing seven directors of thecompany continuing in their roles.

B2Gold, a Vancouver based gold producer withthree operating mines in Nicaragua andthe Philippines, possesses a strong portfolio ofdevelopment and exploration assets inNicaragua, Colombia, Namibia and Uruguay.The company is projecting gold production in2013 of approximately 385,000 ounces andapproximately 400,000 ounces in 2014 fromLa Libertad, Limon and Masbate Mines. With

the first full year of gold production from the

Otjikoto project in Namibia scheduled for

2015, and increased production projected from

La Libertad Mine, the Company is projecting

2015 gold production of 550,000 ounces,

based on current assumptions. Furthermore,

with the successful completion of the

Gramalote project (B2Gold 49%/AngloGold

Ashanti Limited 51%) in Colombia, gold

production could increase to approximately

750,000 ounces in 2017.

B2Gold's corporate objective is to optimize

production at existing mines and build further

shareholder value through the exploration

and development of existing projects and

additional accretive acquisitions. B2Gold

trades on the Toronto Stock Exchange under

the symbol "BTO", on the Namibian Stock

Exchange under the symbol "B2G" and on the

OTCQX under the symbol "BGLPF".

B2Gold Acquires CGA Mining

Gécamines

Gécamines and Copperbelt MineralLimited recently confirmed thefinalization and execution, to thesatisfaction of both parties to thetransaction agreement concluded inAugust 2012, under which the partiesbegan to amicably end their partnershipdeposits and scale Deziwa C.

With the completion of the agreement,Gécamines has acquired 100% of the twofields whose potential is estimated at around5 million tonnes of contained copper. Thisexceptional acquisition fits in the strategic plan(2012-2016) of Gécamines that intends toredeploy its production capacity.

Based on the potential of these two deposits,Gécamines plans to build a steel plant with acapacity of 200,000 tonnes.

Gecamines is a major player in the miningsector in the Democratic Republic of Congo. Itis engaged since 2012 in an ambitious strategicrepositioning giving priority to its ownproduction capacity.

Copperbelt Minerals Limited operates as amining company with copper exploration anddevelopment projects at Mokambo, Deziwaand Ecaille near Kolwezi. The company wasincorporated in 2006 and is based inManchester, United Kingdom.

Gécamines and Copperbelt MineralsLimited Finalize Major Deposits Agreement

B2Gold acquiresCGA Mining

Legal advisors to CGA Mining:

Financial advisors to CGA Mining:

Financial advisors to CGA Mining:

Legal advisors to B2Gold:

Copperbelt MineralsLimited in agreement

with Gécamines

Legal advisor to Gécamines:

Legal advisor to Copperbelt Minerals Limited:

Transaction Reports


Griffin Power

Sumitomo Corporation and The KansaiElectric Power Company Inc. recentlyacquired Griffin Power and GriffinPower 2, owners and operators of theBluewaters power stations in WesternAustralia.

The Bluewaters plants are locatedapproximately 180 km south of Perth andwhen combined are one of the State'slargest-scale coal-fired power stations, witha total output of 416 MW. Since theircommencement of commercial operation in2009, the plants have been providing reliableoperation as a major local power supplier.

Clayton Utz advised the SumitomoCorporation and the Kansai Electric PowerCompany on their $1.2 billion joint acquisitionof the power stations. The Clayton Utz teamdescribed the negotiations as “intense andcomplicated” involving a number of “varied

competing interests”. The Clayton Utz teamexpressed that the successful completion of thetransaction is “a credit to the commercialityand acumen of the parties involved.”

An international syndicate of 15 internationallenders in connection with the successful salewere advised by King & Wood Mallesons andFerrier Hodgson. The syndicate includedsenior lenders, mezzanine lenders and hedgecounterparties to the power stations. Thetransaction involved a range of issuesincluding the restructuring of the financearrangements, a reduction of debt, as well asthe restructuring and securing of the powerstations’ coal supply arrangements. Thoseinvolved expressed that it was a significantand multifaceted transaction spanning overthree years. Preventing the insolvency ofthe Bluewaters power stations following theinsolvency of the parent companies was aparamount objective of the lending syndicate.

Bluewaters Power Stations Sale

Helvea Holding SA

Baader Bank has reached agreementwith the management and the majorityof shareholders on the friendly takeoverof Helvea Holding SA, headquarteredin Geneva, as part of the continuingexpansion of its institutional equitiesplatform.

Based on their strong regional focus andtheir respective client bases, the consecutiveintegration of the two firms forms a highlycapable and well positioned broker in theGermany, Austria and Switzerland region

Helvea is the largest independent Swissequities broker, with a focus on domesticequities and operations in Geneva, Zurich,London, New York, and Montreal. A orresponding agreement with the aim to take

over 100% of the company's outstanding share

capital was also signed. With this acquisition

Baader Bank is following up on its strategic

objective of complementing its current range

of services.

Following the merger, customers of both

companies will benefit from expanded

research coverage in Germany, Austria, and

Switzerland. With its international branches,

Helvea is one of the most capable market

participants in the Swiss equities segment, and

thus augments the existing sales network to

institutional investors through a number of

important centres. In addition, the use of

Baader Bank's technical trading infrastructure

is expected to yield substantial cost synergies.

Baader Bank AG AcquiresHelvea Holding SA

Sale of BluewatersPower to Sumitomo

and Kansai

Legal & financial advisors to Griffin Power’s lenders:

Legal advisor to Sumitomo Corporation andKansai Electric Company:

Legal advisor to the vendor:

Baader Bank AGacquires Helvea

Holding SA

Legal advisor to Helvea Holding SA:

Legal advisors to Baader Bank AG:

Transaction Reports

Hertie Building

Aik Immobilien recently acquiredthe former Hertie building atKarl-Marx-Strasse 92-98 in Berlin'sNeukölln district for approximately €57million from a joint venture companyrepresented by the B&L Real EstateGmbH, Hamburg,

Built in 1967 and renovated from 2008 to2010, the property has 11,435 sqm of retailspace currently occupied by C&A, TK Maxx,1982 by Takko, H&M, Rewe, Aldi and a dmdrugstore. In addition, 3,434 sqm on the upperfloors are used by a fitness centre and 7,773sqm by a self-storage supplier.

B&L Real Estate GmbH were advised by a GSK

Stockmann + Kollegen team led by Dr. Michael

Jani (Real Estate Hamburg) with associates

Dr. Thilo Franke, Felix M. Riethmüller (Real

Estate Hamburg) and Dr. Frank-Florian

Seifert (Public Law, Berlin). In addition to

transactional services GSK’s activities also

included advice on the agreements concerning

the release from the redevelopment area to be

negotiated with the City of Berlin.

Hogan Lovells’ Sabine Reimann (Real Estate,

Düsseldorf) advised aik.

Aik Immobilien Acquires HertieBuilding in Neukölln

HS1

HS1 Ltd., a consortium of BorealisInfrastructure and Ontario Teachers’Pension Plan, and owners of the HighSpeed 1 (“HS1”) railway in the UK, haveentered into a $915 million privateplacement issuance. The proceeds willgo towards refinancing the $2.1 billionproject costs incurred by HS1, Ltd. in2010 when it won a 30-year concessionto own and operate the railway from theUK government's London & ContinentalRailways.

The first-time issuer priced four tranches: a$550 million, 15.5-year tranche priced at3.79%; a £117 million, 18.5-year tranche pricedat 4.21%; a £58 million, 18.5- year tranchepriced at 164 bps over Libor; and a £50million, 23.5-year tranche priced at 4.72%. Theprivate placement issue was lead arranged byNational Australia Bank, Royal Bank ofCanada and Royal Bank of Scotland. Theinvestors, an aggregate of 17 UK, Canadian

and US institutional entities, were representedby a team of Milbank, Tweed, Hadley &McCloy attorneys from their New York andLondon offices, led by Elizabeth Hardin, andincluding James Warbey, James Cameron andSuhrud Mehta.

HS1 Ltd. owns, operates, manages, andmaintains high-speed railway infrastructureand stations. It operates railway between StPancras in London and the Channel Tunnel, aswell as connects with the international highspeed routes between London and Paris, andLondon and Brussels. The company’s railwayis used by domestic trains for commuterservice between London and Kent, as well ascarrying freight traffic. It also focuses on retail,car parking, and advertising media activities atthe stations. HS1 Ltd. was formerly known asUnion Railways (North) Limited and changedits name to HS1 Ltd. in July 2008. Thecompany was incorporated in 1998 and isbased in London, United Kingdom.

HS1 Ltd in $915million PrivatePlacement Issuance

Aik Immobilien acquiresHertie building in Neukölln

for about €57m

Transaction advisor:

Legal advisor to B&L and Centrum:

Legal advisor to Aik Immobilien:

HS1 Ltd $915Private Placement Issuance

Banks:

Legal advisor to HS1 Ltd:

Transaction Reports


ICG-Longbow SSUP

ICG-Longbow has raised £104.6m for itsSenior Secured UK Property DebtInvestments Limited debt fund througha main market IPO listing, withinvestments spread from a range ofinstitutional investors and via wealthmanagers.

ICG-Longbow Senior Secured UK PropertyDebt Investments Limited will provide seniorsecured loans to assist in the acquisition andrefinancing of commercial property acrossthe UK. As a listed vehicle, investors will havedirect access to this asset class in a liquidstructure for the first time. A dividend incomeof around 6% per annum is targeted once fullyinvested. The investment objective of theCompany will be to construct a portfolio ofnewly originated loans, secured by firstranking fixed charges on quality income

producing investments, in support of wellcapitalised Borrowers who can demonstrate atrack record in asset management.

ICG-Longbow SSUP Chairman, Jack Perrycommented: “Raising over £100m in whatis currently a very difficult fund raisingenvironment is a great achievement. Thesuccess is a testament to the experiencedICG-Longbow team and the design of theproduct. A 6% pa dividend yield from adiversified senior loan portfolio is attractiveand there has been significant demand frominvestors looking to diversify their portfoliosinto new investment opportunities.”

The Listing of ICG-Longbow SSUP has beensponsored by Investec Bank plc, and supportedby ICG-Longbow, a 51% subsidiary ofIntermediate Capital Group.

ICG-Longbow SSUP Raises £104.6m inMain Market IPO

Lifestyle EntertainmentBusiness

Royal Philips Electronics recently

announced that it has signed an agreement

regarding the transfer of its Lifestyle

Entertainment business (Audio, Video,

Multimedia and Accessories) to Funai

Electric Co., Ltd. Under the terms, Funai

will pay a cash consideration of €150

million and a brand license fee, relating to

a license agreement for an initial period of

five and a half years, with an optional

renewal of five years. The deal for the

Audio, Multimedia and Accessories

businesses is expected to close in the

second half of 2013. The Video business

will transfer in 2017, related to existing

intellectual property licensing

arrangements. The gain on the transaction

will be recorded at the closing date.

The transaction is subject to customary

conditions, including regulatory filings and

works council procedures. The Remote Control

activities, which are predominantly business-to-

business, are excluded.

Philips CEO, Frans van Houten commented:

“With this transaction we are taking another step

in reshaping the Consumer Lifestyle portfolio and

transforming Philips into the leading technology

company in Health and Well-being…I am

confident that today’s agreement with Funai,

our partner for over 25 years, will create a

promising future for Philips Audio, Video and

Entertainment, and continuity for our customers.

It will leverage Philips’ strong brand, strength

in innovation, and leadership position in these

businesses, with Funai’s strong presence in North

and Central America - and Japan, and its supply

and manufacturing expertise.”

Royal Philips Electronics to Sell Lifestyle Entertainment Business to

Funai Electric

ICG-Longbow SSUP raises£104.6m in main market IPO

Sponsor:

Legal advisors to ICG-Longbow SSUP:

Legal advisor to sponsor:

Reporting Accountant and Auditor to ICG-Longbow SSUP:

Royal Philips Electronics tosell its Lifestyle Entertainment

business to Funai ElectricLegal advisors to Philips:

Legal advisors to Funai Electric:

IP advice to Funai Electric:

Transaction Reports

Mapletree Greater ChinaCommercial Trust

Mapletree Investments Pte Ltd. recentlyannounced that its wholly-ownedsubsidiary, Mapletree Greater ChinaCommercial Trust Management Ltd.,the manager of Mapletree GreaterChina Commercial Trust has launchedan initial public offering at an offeringprice of S$0.93 per Unit. As a result ofthe interest received from institutionalinvestors during the bookbuildingprocess, the Units have been priced atthe top end of the offering price range.

Raising gross proceeds of approximatelyS$1.68 billion, Mapletree Greater ChinaCommercial Trust Management Ltd. will be

the largest real estate investment trust IPOever in Singapore, making it a milestone listingon the SGX-ST. It is also the first-ever realestate investment trust with commercialproperties in both China and Hong Kong,presenting investors with the uniqueopportunity to participate in the favourablegrowth dynamics of Greater China. Theinitial portfolio comprises two best-in-classcommercial properties in Hong Kong andBeijing. Mapletree Investments Pte Ltd. hasan established track record in listing andmanaging real estate investment trusts, andwill hold a 32% stake in Mapletree GreaterChina Commercial Trust Management Ltd.post-listing.

Mapletree Launches Fourth Real EstateInvestment Trust

Mountain Cablevision

Rogers Communications announcedrecently that it had signed agreements withShaw Communications to secure anOption to purchase Shaw's AWS spectrumholdings in 2014, and to acquireShaw's cable system in Hamilton, Ontario- Mountain Cablevision Limited. Shaw willalso acquire Rogers' one-third interest inTVtropolis and will enter into negotiationswith Rogers for the provision of certainservices in Western Canada. Rogers netcash investment is expected to totalapproximately $700 million once allaspects of the transactions are completed.

Shaw Communications Inc. is a diversifiedcommunications and media company, providingconsumers with broadband cable television,High-Speed Internet, Home Phone,telecommunications services (through ShawBusiness), satellite direct-to-home services(through Shaw Direct) and engaging

programming content (through Shaw Media).

Shaw serves 3.3 million customers, through a

reliable and extensive fibre network. Shaw Media

operates one of the largest conventional television

networks in Canada, Global Television, and 18

specialty networks including HGTV Canada, Food

Network Canada, History and Showcase.

Rogers Communications is a diversified Canadian

communications and media company engaged

in wireless voice and data communications

services through Wireless, Canada's largest

wireless provider. Through Cable, Rogers

Communications are one of Canada's leading

providers of cable television services as well as

high-speed Internet access and telephony

services. Through Media, the company is engaged

in radio and television broadcasting, televised

shopping, magazines and trade publications, and

sports entertainment.

Shaw Communications Inc AnoouncesPurchase & Sale of Assets with Rogers

Communications

Mapletree Greater ChinaCommercial Trust REIT IPO

Investors:

The Hong Kong and Shanghai Banking Corp. Ltd.

Singapore counsel to underwriters:

Underwriters:

Legal advisors to the issuer:

Legal Advisors to banks:

Rogers to buy Shaw'sMountain Cable, spectrumlicenses for C$700 million

Legal advisors:

Financial advisors:

Environmental due diligence provider:

Transaction Reports


Norwegian Cruise Lines

Norwegian Cruise Line Holdings Ltd.recently announced the closing of itspreviously announced initial publicoffering of 27,058,824 of its ordinaryshares at a price of $19.00 per share.The number of shares sold include3,529,412 shares sold as a result of thefull exercise by the underwriters of theiroption to purchase additional shares.The net proceeds of the offering, afterdeducting underwriting discounts andcommissions and estimated expenses,were approximately $477.6 million.

UBS Investment Bank and Barclays acted asbookrunners and the representatives of theunderwriters for the offering. Citigroup,Deutsche Bank Securities, Goldman, Sachs &

Co. and J.P. Morgan also acted as bookrunners

for the offering. DNB Markets, HSBC,

SunTrust Robinson Humphrey, Wells Fargo

Securities and Lebenthal Capital Markets

acted as co-managers for the offering.

Norwegian Cruise Lines are a leading

global cruise line operator, offering cruise

experiences for travelers with a wide variety of

itineraries in North America (including

Alaskaand Hawaii), the Mediterranean, the

Baltic, Central America, Bermuda and the

Caribbean. The company strives to offer an

innovative and differentiated cruise vacation

with the goal of providing its customers with

the highest levels of overall satisfaction on

their cruise experience.

Norwegian Cruise Lines IPO

Smarter Grid Solutions

Smarter Grid Solutions, a UKbased leader in the development anddeployment of 'active networkmanagement' technology* for the smartgrid market, has secured £3 million ofinvestment in a deal led by ScottishEquity Partners (SEP) along withScottish Enterprise through the ScottishInvestment Bank and the University ofStrathclyde.

Smarter Grid Solutions' pioneering real-timegrid management software offers powercompanies affordable ways to manageelectricity network congestion issues at a local,regional or national level and cope withincreasing volumes of low carbon generationand demand. Founded in 2008, the company

now employs more than 30 people and hasambitious recruitment plans over the nextthree years.

The new funding allows Smarter GridSolutions to position itself to meet substantialinternational demand for smart gridtechnology, a huge potential market estimatedto be worth more than $56 billion by 2020.The investment will enable the company totake forward ambitious product developmentplans and to take advantage of emergingopportunities in the UK, Europe and NorthAmerica. To do this the company will also growits Glasgow base; expand its London office;and open an office in New York to take thetechnology to the North American market.

Smarter Grid Solutions Secures£3M Investment

Norwegian CruiseLines IPOLead underwriters:

Underwriters:

Legal advisors to Norwegian Cruise Lines:

Legal advisors to NorwegianCruise Lines:

Auditor:

Scottish Equity Partnersinvests £3m in Smarter

Grid SolutionsInvestors:

Legal advisor:

Transaction Reports

Solunion

Solunion, has been jointly created byEuler Hermes and MAPFRE to offertrade credit insurance solutions inSpain and Latin America.

Solunion became an official entity on January28, 2013, with the signing of the shareholders’agreement and official nomination of theBoard of Management members. LudovicSénécaut, CEO of Euler Hermes in NorthernEurope, was named Solunion chairman, andAlfredo Castelo, chairman of MAPFREGLOBAL RISKS, became vice chairman. Thecompany is owned equally by Euler Hermesand MAPFRE.

Solunion offers comprehensive trade-relatedcredit insurance solutions and services forcompanies of all sizes in a wide range of tradesectors.

The Solunion group management team

includes Fernando Pérez Serrabona, CEO;

Antoine George, Chief Financial and

Administration Officer; Laurent Treilhes, Risk,

Information and Claims director; and Felipe

Buhigas, Market Management, Commercial

and Distribution director. National CEOs

include Pascal Personne in Spain and Juan

Antonio García Serrano in Argentina.

Fernando Pérez Serrabona commented: “This

combination of Euler Hermes’ and MAPFRE’s

strengths enables us to develop a much wider

offer for our clients. Solunion blends solidity,

experience, knowledge and an international

presence with a focused objective: to respond

quickly and efficiently to our customers’

needs.”

Euler Hermes and MAPFRE Create TradeCredit Insurance Solutions Provider,Solunion in Joint Venture Agreement

Spear Group

Constantia Flexibles Group,headquartered in Vienna, Austria,recently signed a deal to acquireSpear Group, a leading manufacturer oflabels, globally with headquartered inMason, Ohio.

Spear has been the world’s leading innovatorand supplier of pressure sensitive labels for thebeverage industry since 1982. The companyhas sales of approximately US$ 195 millionwith 650 employees located at four facilities inNorth America, one site in Europe (UK),one site in South Africa and a sales office inSingapore.

Burges Salmon LLP acted for seniormanagement and institutional sellers on thesale of Spear Group to Constantia FlexiblesGroup. The Burges Salmon team was led bycorporate finance partner Richard Spink,

supported by senior associate Vanessa Joynerand associate Adam Love, as well as specialistsfrom the firm's employment, banking and taxteams.

Constantia Flexibles Holding GmbH providespackaging solutions for human and pet foodproduction, pharmaceuticals, and beverageindustries in Austria and internationally.

Constantia Flexibles CEO, Thomas Ungercommented “We will be able to serve ourcustomers even better together with Spear, aleading beverage labels business with a highlyattractive, global, blue-chip customer base.The Group’s outstanding technologicalcapabilities present many opportunities forcontinued profitable growth. We look forwardto partnering with Spear’s excellentmanagement team to capture the benefits fromcombining our businesses.”

Constantia Flexibles GroupAcquires Spear Group

Euler Hermes in jointventure agreement with

Mapfre to create Solunion

Legal advisor to Euler Hermes:

Constantia FlexiblesGroup acquires Spear Group

Legal advisors to Spear Group:

Transaction Reports


Vietnam Airlines

An Export Credit Agency facility of $110million has been arranged and financedby Citi and Development Bank of Japan(DBJ) with the support of EuropeanExport Credit Agencies and fronted byEULER HERMES, the German exportcredit agency. Hogan Lovells advisedVietnam Airlines on all legal aspects ofthis transaction.

Commenting on the transaction, RichardJadot, Hogan Lovells partner, said: "We arepleased to have advised Vietnam Airlines forthe second time on this important strategictransaction, highlighting our strengths inadvising on complex aircraft financetransactions and expanding our aircraftfinance capabilities in Asia."

For Development Bank of Japan, thistransaction was the first time this bank workedtogether with Citi. “DBJ believes that thistransaction will lead to long-term partnershipwith Citi as well as Vietnam Airlines,” MasaoMasuda, DBJ’s acting head of global aviationteam, said.

Pham Ngoc Minh, President and CEO of

Vietnam Airlines said “This finance package

will enable Vietnam Airlines to accomplish its

fleet expansion plan which aims to enhance

our operating efficiency on both domestic and

international routes. We strongly believe that

this credit facility agreement between Vietnam

Airlines and Citibank will pay for way for

our long-lasting partnership in the future and

enable Vietnam Airlines to complete its

realization of the development strategy,

becoming one of the Asia’s carriers of choice

by 2020,”

“For the third time with Vietnam Airlines, Citi

is very proud to be the Joint Co- Arranger for

the ECA Facility of $110 million. This critical

deal will surely help the company expand and

increase the capacity of Vietnam Airlines fleet,

in an effort to better meet the demand of

passenger and cargo transport,” said Brett

Krause, Managing Virector and Vietnam Citi

Country Officer.

Vietnam Airlines ECA Financing

Yuexiu Property

Yuexiu Property Company hasestablished a US$2 billion medium termnote programme (MTNP) which allowsthe firm to issue notes when necessary.Bank of China (Hong Kong), BOCI Asia,DBS Bank, HSBC and Morgan Stanleyare joint arrangers and joint dealers,with Yue Xiu Securities Companyacting as a dealer with an offering ofUS$350,000,000 3.25%. notes due 2018and US$500,000,000 4.50% notes due2023 under the medium term noteprogramme completed on 24 January2013.

Moody's Investors Services has assigned afirst-time "Baa3" issuer rating with stableoutlook to Yuexiu Property, and a provisional"(P)Baa3" rating to the MTNP. Moody's hasalso assigned a Baa3 rating to the first USDsenior unsecured notes issued under theprogramme.

Fitch Ratings has assigned Yuexiu Property along-term issuer default rating of 'BBB-' with

stable outlook and a senior unsecured debtrating of "BBB-". Fitch has also assigned a'BBB-' rating to the programme and itsproposed senior unsecured USD notes issuedunder the programme an expected"BBB-(EXP)" rating.

The programme serves as an efficient andflexible mechanism for the company to tap thebond market for its financial needs. The netproceeds from the issue of notes will be used forgeneral corporate purposes.

Zhong Lun Law Firm acted as PRC law counselto Yuexiu Property Company Limited. ZhongLun is a leading capital markets law firm,advising issuers and underwriters on a broadrange of domestic and international private andpublic offerings. Its lawyers have advisedhundreds of PRC-based companies on theironshore and offshore offerings and listings.Bloomberg ranked it as one of the most activePRC capital market firms in accordance with itsstatistics.

Yuexiu Property Company Limited $2Billion Medium Term Note Programme

Vietnam AirlinesECA financing

Banks:

Legal advisors to Vietnam Airlines:

Yuexiu Property CompanyLimited US$2 Billion Medium

Term Note Programme

Arrangers and dealers:

Issuer:

Legal advisors to Yuexiu Property Company Limited:

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