Mallesons Stephen Jaques partner Nicholas Creed says that the Perth finance team has doubled in size since he joined it three years ago, having relocated to Perth from Melbourne.

“It’s been a period of tremendous growth for the project finance market in Perth, and I think that it would be news to lawyers on the east coast to think that the third biggest finance team at Mallesons is in Perth,” he says.

According to Creed, the success of the team, which now comprises 15 lawyers, has come on the back of the expertise they have developed in commodities and resources transactions.

“What we’re really seeing now is Perth becoming a real resources centre of excellence,” he says, likening Perth’s reputation to that of Houston’s as the oil and gas capital of the US and Aberdeen’s as the oil and gas centre of Europe.

In particular, Creed says, his team have been getting increasingly involved in international projects, in places ranging from Tanzania to Mauritania, Mongolia, Indonesia and the Philippines.

“I think that because of the experience that Perth-based lawyers, bankers and financial advisers have developed in resources projects [and] because of the growth in the Western Australian resources [market], our skills and experience and just our way of doing deals are now transferrable to any other jurisdiction where you’re wanting to do resource financing,” he says.

Creed says Perth itself is fast becoming a target for foreign investment from new sources; countries such as China, Russia and Indonesia.

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“If we look back five or six years ago, the foreign direct investment we were seeing coming through the Perth market was all from the US or Japan.

“But now we’re seeing a huge flow of direct Chinese interest as well, and they’re coming to Perth-based law firms to do that work — and that’s hugely exciting for us,” he says.

According to Creed, another feature of the Perth market is that it’s not just the top-tier firms that are getting in on the action — there are also a number of small, boutique firms getting involved in major transactions.

“There are a flock of smaller firms that we see on the other side of these deals that you don’t see in the Sydney or Melbourne markets,” he says. “And they are doing some serious deals, not just in Western Australia but also following clients into North Africa and Asia as well.”

One such firm is Wright Legal, which has seen its two-lawyer project finance team grow to four over the last few years. Among the firm’s current matters is a nickel project based in Brazil, and the firm was also involved in a nickel project in Zambia last year.

Wright Legal partner Gaelan Cooney says that prior to the US credit crunch, the market in Perth was being fuelled by a booming equity market and strong commodity prices.

“You’ve had junior mining companies who are in a position to raise equity and with the commodity prices rising, it means their projects that may not have been commercially feasible previously can now be done,” he says.

However even post-credit crunch, Cooney says the market is robust and doesn’t show signs of slowing down.

“I don’t think we’re really seeing a real drop-off in this market, either in Australia or overseas. I think it’s really ‘steady as she goes’. Projects that were in the pipeline before the credit crunch hit, there’s really no reason for them to be derailed,” he says.

“Banks can force more certainty as they wish onto a project by forcing people to hedge and lock in long-term contracts, so you can isolate the project itself from the credit crunch to a certain extent.”

As with Mallesons, Deacons partner Alen Pazin says Deacons Perth finance team has expanded “dramatically” over the past three to five years, and he says the firm has no intention of slowing down on recruitment.

The team’s most recent recruit comes from Singapore, and according to Hays Legal senior recruitment consultant Kate Fagan, recruiting from overseas is not unusual in the Perth finance market. “There’s definitely candidates coming from [Australia’s] east coast and from overseas, because I guess, traditionally, we haven’t had such as strong a finance industry as maybe the east coast,” Fagan says.

Similarly to Cooney, Pazin says the pre-credit crunch strength of the equity markets has resulted in a boom in business for the firm’s finance team in overseas -based commodities projects over the last few years, and he lists Latin America, Africa, South East Asia and Scandinavia as the prime markets.

“I think what we’ve seen during that period is certainly a growth in project financing techniques and an appetite for transactions and assets located in other jurisdictions,” he says.

However with a dampening of the equity markets in the wake of the credit crunch, Pazin says that debt financing has definitely returned to favour — particularly for junior to mid-sized companies — and the Deacons team have again seen a growth in this type of activity.

While Perth is still most widely recognised for commodities and resources, both Pazin and Creed also noted that infrastructure projects are a growing source of work for Perth project finance teams.

“There has certainly been a growing sophistication of, and growing appetite locally for infrastructure projects, whether it be power, oil and gas or resources services.” Pazin says.

“There’s definitely a growing use of structures which I think have been longstanding in other markets — things like ‘build own and operate’, ‘build and own’ and operate transfer type structures.”

Creed also noted the growth in ports, railways and in civil infrastructure projects.