SOME OF New York’s finest lawyers are taking a fervent interest in Australian legal expertise in resources, and the private ownership and operation of infrastructure, according to Freehills’ leading corporate partner.
Mark Rigotti embarked on a weeklong visit to the US city recently in an effort to open channels with local practitioners and share observations of developing trends.
Travelling alongside senior M&A partner Leon Pasternak, Rigotti’s week in the Big Apple was an M&A-inspired visit to build relationships the firm hopes will add to its M&A practice.
“It was not to go and scout to set up an office. It wasn’t to recruit people,” he said. “It was to go and visit three stakeholders for this firm: US law firms; some of our clients, particularly in the private equity area; and our alumni.”
The visit included meetings with what Rigotti described as “charmed circle firms” and “global giants”, in order to open communication and work referral channels.
He also spent time with both Australian and American clients to strengthen relationships, develop a better understanding of their businesses, “and ultimately to form a pipeline of good work from them, particularly the private equity houses,” he said.
Although similarities in developing trends in the US and Australian markets abound, Rigotti believes one key difference is our active resources M&A industry, particularly concerning consolidation in that mid-cap sector.
“We’ve done quite a bit of work, with Peabody buying Excel Coal, Tullow Oil buying Hardman Resources, those sorts of transactions. They’re not seeing that in the States. They are not seeing the same level of M&A activity in resources,” he said.
A lot of that activity is stemming from the advanced state of Australian assets and our relative geographic proximity to China, Rigotti said.
“China is the biggest market in the world at the moment. It’s cheaper to ship coal, gold, nickel and alumina from here to China than it is all the way across from the United States.
“So in Australia, if you’re a global player, it is cheaper to buy an Australian asset than it is to develop a mine in West Africa or the United States or Canada,” he said. “The geography works in our favour … [and] they are well developed, well run assets.”
Another area of interest is Australia’s expertise in privately owned and operated infrastructure, Rigotti said. “That is something they’ve struggled with, because the public sector owns it over there, and it’s chronically under-funded.”
According to Rigotti, Australian infrastructure specialists, and clients of Freehills, Macquarie Bank, Hastings and Babcock & Brown are making a big impact in New York.
“People are very aware of them, and very aware of them being able to buy, fund and run infrastructure better than the local councils and any of the local players in the US,” he said. “None of the private equity or the US operators have really got that figured out yet.”