Dean Collins has left his post as partner at O’Melveny & Myers to join global law firm Dechert as managing partner of its newly established Singapore office.
Collins, whose main focus is fund formation in private equity, real estate, venture capital and hedge funds in Asia, was at OMM in Singapore for five-and-a-half years, having previously worked in-house at UK-based private equity firm Actis.
Dechert is expanding its practice in Asia, the Singapore opening a “strategic move” for the firm as Singapore continues to work to establish itself as an asset management hub in Asia.
Singapore has been offering a variety of tax breaks and incentives to private equity and other asset managers to encourage them to domicile there – something other financial hubs, such as Hong Kong, have been slower to do.
However, Collins’ move was motivated by Dechert’s strong practice globally with regards to regulatory issues impacting alternative asset managers, he explained.
“The key driver has been this belief that has grown over a long period of time that private equity, which when I started out was a very heavily unregulated business, has become so regulated that [corporate lawyers] have realized that the regulatory component [to private equity] is so critical,” Collins said.
As the Volcker Rule in the US comes into force, separating the investment banking and private equity operations in financial institutions from their consumer lending businesses, as well as the Alternative Investment Fund Manager Directive (AIFMD), which puts constraints on marketing funds in the European Union, Asian fund managers are increasingly looking for legal guidance on regulatory matters globally.
“Whilst most funds in Asia are [still] going to be Cayman[-domiciled] funds, there is definitely a move amongst part of the investor community who want to use onshore jurisdictions,” Collins explained, adding that in many times funds are being forced to do so by their LPs.
Collins brings a wealth of relationships with him to the Dechert practice, planning to tap into the growing number of boutique funds in Asia – many of whom are splitting off from global players and setting up on their own.
He said, “We are seeing more and more boutique-type private equity firms emerging in Asia and so lots of opportunities in that space and that is one of the key drivers [for Dechert] in the region. I’ve always done a lot of work for first time managers and that will continue.”
“One of the themes I’ve really seen in the last couple of years is people moving because they are at a larger institution that is no longer capable of doing deals that they feel are appropriate for the opportunity set in the jurisdiction.”
For example, some local teams at larger institutions get frustrated at the bigger ticket sizes prescribed by investment committees in the West, which prevent the teams from doing smaller deals, allowing them only to invest once every few years. Therefore, many teams are spinning out or leaving to set up their own operations, Collins believes.
“We are seeing more and more people leaving banks, larger private equity firms, even pan-Asian firms to set up on their own.”