An increasing number of law firms are reaping good returns from the thriving business relationship developing between China and Australia. China Everbright Limited (CEL) has ventured ‘Down Under’, building two funds with Australia’s Macquarie Bank to leverage China’s infrastructure opportunities.
Mallesons and CEL’s ongoing legal advisor, Paul Hastings, both have a hand in the joint venture. Australian and Hong Kong partners, John Sullivan and Hayden Flinn, are leading Mallesons representation for Macquarie Bank. Paul Hastings’s Hong Kong-based corporate partner Raymond Li, partner Vivian Lam (pictured) and Jenny Law are acting for CEL.
The joint venture is aimed at establishing two funds for Chinese infrastructure investments, seeking to raise US$1.5bn. Both Macquarie and CEL have committed to jointly contributing US$100m.
“The difficulty lies with the establishment of the domestic fund, which is intended to mirror the same governance structure and arrangements that we stipulate for an international fund,” said Lam. “It is not possible to just transpose the international fund structure and terms to the domestic fund, as there are certain limitations to what we can do onshore under current PRC law and regulations.”
The International Monetary Fund forecasts that the Chinese economy will continue to grow at between 6%-10% per annum, despite the current crisis, with rates of investment still believed to be the highest in the world.
“The international and domestic funds will make investments in infrastructure in Greater China. The establishment of the two funds demonstrate domestic and international investors' interests in these types of assets,” added Lam.
With investments and acquisitions occurring in a variety of industries, China has become a force to be reckoned with, in Australia’s M&A sector. Allens Arthur Robinson and Freehills jointly profited from China Investment Corporation’s (CIC) investment in Australian property trust group Goodman Group.
China’s huge appetite for resources also brought about an A$3.3bn acquisition deal acted on by Australian firms Allens and Corrs Chambers, local firm King & Wood and international player Baker & McKenzie, when Yanzhou Coal acquired Felix Resources recently.
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