Could you provide a brief journey of how you arrived where you are today?
I joined Allen & Overy (A&O)’s capital markets department in 1987 and have been there since. During my time at A&O, I have developed a wide practice area within the capital markets field and been lucky enough to have been involved in a number of ground breaking transactions.
I have always had an interest in emerging markets and this, coupled with extensive diligence experience gained over years of documenting debut transactions, led me to become involved in the later stages of the Islamic Development Bank global Sukuk issue in 2003 (only the second such issue of its kind). Islamic finance is a fascinating field and I count myself very fortunate indeed to be at the forefront of an entirely new area in the global capital markets.
What does your role involve?
Although I concentrate on public Sukuk issuance where I advise investment banks or underlying borrowers, as a firm we are also involved in a range of more private transactions in banking, projects, derivatives, funds and other fields, advising various parties on structuring new transactions. Our role on a public Sukuk issue involves drafting and/or negotiating all the legal documents (typically between five and eight documents of varying lengths) and, in certain cases, preparing the disclosure on the underlying borrower or leading the diligence in relation to that borrower. This is generally travel intensive and highly stimulating work.
What is your greatest achievement to date?
Documenting the first ever global Sukuk issue, for Malaysia, in 2002, which was led by my partner Ken Aboud and his team in Singapore. Every new Sukuk issue brings its own challenges. In Bahrain, for example, we developed a structure whereby the issuer leased the underlying assets from Bahrain in a head lease rather than purchasing them to get round restrictions on the sale of government land. We also invented the delegate structure in that transaction which is now widely used.
Which of your products/services deliver the best results?
We pride ourselves on delivering, in the words of one recently published directory, a ‘gold-standard service’. The fact that we can marry a market-leading capital markets practice with a deep understanding of Shariah concepts is perhaps our major competitive strength.
What are the strengths of your business?
Our Islamic finance team is broadly spread around the firm in terms of practice areas covered and geographic location. We have Islamic finance specialists in London, Dubai and Singapore and so, are involved in both major public Sukuk markets. We also documented the first (and, to date, only) European Sukuk, for Saxony Anhalt, out of our Frankfurt office. We also have a deep institutional knowledge of the capital markets (having documented the first ever Eurobond issue in 1963), which is a real strength when developing new products.
What are the factors contributing to the success of your company?
All service organizations live and die with their people. We have a fantastically dedicated Islamic finance team and their skills, work ethic and professionalism are hugely appreciated by our clients. We are also widely recognized for our ability to innovate and lead the market and in all areas of the capital markets, our clients look to us to help them in leading the development of new products and business lines.
What are the obstacles faced in running your business today?
A major challenge that will face all players on the legal side of the Islamic finance industry is their ability to recruit and train staff to service the ever-growing demands of clients in this area. Topically, the current credit crunch has shown that Islamic finance, like all other areas, is not immune to global trends. Although out of our control, I fear for the market when liquidity returns as there is now a large number of potential issues waiting to be launched. If too many seek to access the market at the same time, investor indigestion could set in!
Where do you see the Islamic finance industry, maybe in the next five years?
Present market conditions aside, I see the public Sukuk market continuing to expand rapidly. I hope that over time, a degree of standardization in relation to certain structures will evolve, which will give the market significantly greater impetus. It is more difficult to make predictions on the private side of the industry although the growth in structures and products in select areas has been phenomenal in recent years.
Name one thing you would like to see change in the world of Islamic finance?
While the significant development of the Islamic finance capital market in recent years has been recognized and welcomed by its participants, it is still widely perceived as a niche market by those in the broader conventional field. A widespread change in this perception would significantly boost the further development of the Islamic finance capital markets.
Allen & Overy is an international law firm with offices in 27 major cities worldwide. The firm has been a major presence in the Middle East for over 25 years. It recently announced the opening of a new office in Abu Dhabi and an associated office in Riyadh, boosting its presence in the Gulf region.