The Herbert Smith Freehills investment funds team has recently advised on four significant fund launches. The team advised Goldman Sachs International on its role as sponsor on CVC Credit Partners European Opportunities €350 million IPO, and advised JP Morgan Global Convertibles Income Fund Limited, Polar Capital Global Financials Trust plc and Doric Nimrod Air Three Limited on their IPOs.
Herbert Smith Freehills advised Goldman Sachs International on the €350 million IPO and structuring of CVC Credit Partners European Opportunities Limited (CVCEOL), marking CVC Credit Partners' first venture into the closed-ended, listed investment funds' market. CVCEOL, which commenced trading on the LSE's Main Market on 25 June 2013, is a Jersey-domiciled feeder fund which gives investors exposure to a Luxembourg-based credit vehicle managed by CVC Credit Partners, the credit arm of the CVC Capital Group.
The listing of CVCEOL marks the culmination of efforts to structure a listed, closed-ended vehicle that would be attractive to investors in the current climate and the Herbert Smith Freehills team took a leading role in the development of that structure.
The team was led by Funds partner Nigel Farr, assisted by associate Varun Kapila; the Sponsor and Placing Agreement was negotiated and drafted by equity capital markets partner Chris Haynes, assisted by senior associate Caroline Rae; US securities law advice was provided by partner Steve Thierbach and tax advice was provided by partner Bradley Phillips.
Commenting on the transaction, Nigel Farr said: "We are delighted to have worked on one of the largest listed investment fund IPOs since the start of the financial crisis. I have been convinced from the outset that this structure is a game-changer which will be very good for generating IPOs of further closed-ended funds."
Herbert Smith Freehills advised Goldman Sachs International as sponsor, sole global co-ordinator and sole bookrunner as to English law and US securities law and Dexion Capital plc as lead placing agent as to English Law; Clifford Chance LLP advised CVCEOL as to English law and US securities law; Bedell Cristin advised CVCEOL as to Jersey law; Paul Hastings (Europe) LLP advised CVC European Opportunities S.àr.l (the credit vehicle into which CVCEOL invests) as to English law.
Herbert Smith Freehills, led by Nigel Farr, assisted by associate Ruth Leslie, also acted for JPMorgan Global Convertibles Income Fund Limited, a new closed-ended Guernsey incorporated investment company. The company is the only one of its kind to offer an income-focused portfolio of global convertible bonds to UK investors. The launch was managed by the Investment Trusts team at J.P. Morgan Asset Management (UK) Limited, now headed by Simon Crinage, with Winterflood Investment Trusts as sponsor. Following the publication of the prospectus on 17 May 2013, with a target issue under the offer and placing of in excess of £100 million, £136 million was raised and the shares were admitted to listing and trading on the main market of the LSE on 11 June 2013. Tax partner Bradley Phillips also advised.
The investment funds team also acted for Polar Capital Global Financials Trust plc (PCFT), a closed-ended investment trust with a mandate to invest in the global financials sector and targeting a raise of in excess of £100 million. PCFT raised £153 million through the issue of 153 million ordinary shares, with 30.6 million subscription shares attached, which were admitted to listing and trading on the main market of the LSE on 1 July 2013. Nigel Farr led the team assisted by associate Dan Faundez.
Finally, a Herbert Smith Freehills team, led by Scott Cochrane, assisted by associate Indraneil Ghosh, advised on the launch of aircraft fund Doric Nimrod Air Three Limited (DNA 3) on the London Stock Exchange's Specialist Fund Market. DNA 3 seeks to give investors an attractive income yield and the prospect of capital growth by investing in Airbus A380 aircraft which are leased to Emirates. It is the third in line of such products (after Doric Nimrod Air One Limited and Doric Nimrod Air Two Limited) which represent an innovative structure for obtaining equity financing for aircraft purchase while also offering investors seeking a secure income yield an alternative to more traditional income producing funds.
The equity of £211 million raised by DNA 3 will be supplemented by debt of approximately US$630 million to be raised through an enhanced equipment trust certificate (EETC) issue.
Nigel Farr concluded: "The calibre of these clients and deals demonstrates the depth and expertise of our funds practice. It's been a busy few months to bring these deals to market which has seen the team advise on over £800 million of clients' fundraising, a significant sum in current market conditions."
