Laurent Fessmann (Baker McKenzie): Consistency and change
An interview with Laurent Fessmann of Backer McKenzie .
What are your clients' current demands?
I can see that the markets have an enormous amount of liquidity in investment funds, asset management and even when it comes to the accounts of multinationals. This available cash must be invested to avoid losses. Current trends show a strong interest in real estate and debt funds.
The latter provide many opportunities, even for those who aren’t specialists. The funding of the real economy via the fund industry has become a reality.
Besides, the market participants source directly available funding on the capital markets where debt and bond issuance programmes are highly sought after. The Luxembourg intra-group finance company has a wide range of legal options to meet the funding needs.
« We’re growing stronger. »
How is your company changing?
We’re growing stronger.
Our 9 partners have just welcomed several additional and renowned experts: Catherine Martougin (Funds), Jean-François Trapp (Real Estate), Anthonio Weffer (Tax). After 7 years, our office is now made up of over 80 people. Our client base in the major legal and tax areas is stable essentially composed of fund sponsors PE-RE - private equity and real estate - Asset managers entrust us with the full range of their legal needs: fund formation, fund tax and corporate structuring, fund financing transfer pricing issues, contracts between companies and, lastly, the acquisitions or sales deals. A large majority of our tax clients and investment management clients are directly sourced by our Luxembourg team, with a real focus on US customers.
We are very proactive and take part in road shows, conferences and initiatives which promote Luxembourg abroad. A few US big boys as first movers are sometimes sufficient to trigger the migration of more asset managers to Luxembourg.
What impact is Brexit having on your business?
It’s clearly a hot topic for banks and all financial entities relying on the EU passporting whether in or out of the United Kingdom.
Since mid-January, the British position has at least become clear: leave the common market and to sign bilateral agreements and better no deal than a bad deal. This gives us immediately a sense of the scenario the lawyers shall start working at. Our clients are creating dedicated teams which are establishing ‘maps’ of their
exposure to the European market. They’re looking at the worst case scenario, given that this is the most conservative approach, and they’re making plans on that basis. These teams generally expect a return to continental Europe, not necessarily with subsidiaries of English companies but rather "lighter" with branches which will be able to operate in a gradual way, starting with smaller structures for 2 years before considering opening subsidiaries.
This also reduces costs as one foot is already standing in continental Europe.
Brexit perfectly summarize our current challenges: provide consistent and sustainable answers in a dramatically rapid changing world.