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Australian capital market trends, revealed
Higher importance will be placed upon superannuation funds and other private equity within the Australian capital markets landscape, according to this equity capital markets expert.
Lauren Croft
Antony Rumboll is a partner at Baker McKenzie and head of its Australian equity capital Markets group — and recent winner of the capital markets category at this year’s Partner of the Year Awards.
“From my perspective, it takes continued focus over a number of years to be the best you can be in your chosen practice area. I think I was successful not only because of my position in the market and the transactions I have led over the last 12 months (including external training and opinion pieces) but also my broader contribution to my firm and its growth,” he said.
“For me, that has centred on our people, both in terms of their career development but also to field high-quality teams to service the legal needs of our clients. For those putting in a submission, I would recommend you focus on your broad contribution to the market, your firm and your profile.”
In terms of trends within the capital markets space, Mr Rumboll said initial public offerings (IPOs) are influencing the Australian market greatly.
“2022 has seen reduced transaction volumes when compared to 2020 and 2021. IPOs are essentially off the table until 2023, although there are some large offshore IPOs proposed, which may help sentiment. As the IPO market in Australia is currently closed, we expect to see private equity funds (and others) provide funding to pre-IPO companies to bridge them until the IPO markets open again,” he explained.
“Australian corporates generally have strong balance sheets, which has meant much activity has centred on capital management initiatives (like buy-backs) and growth/acquisition funding, where large and complex transactions have been well-supported.”
The landscape is also set to undergo a number of changes moving forward, Mr Rumboll revealed.
“I expect to see Australian superannuation funds and other private capital take an increasingly important position in the Australian capital markets. In addition, investors are placing an increasing focus on ESG and evaluating how listed entities address this key development. Companies need to better identify their key ESG risks and address not just disclosure but also action plans to address those risks,” he explained.
“ASIC, as well as other global regulators, is acutely focused on greenwashing and taking action where it sees it happening. In line with the trend towards mandatory ESG disclosure, the Securities and Exchange Commission in the US recently proposed disclosure enhancements for certain investment advisors and investment companies seeking to categorise certain types of ESG strategies broadly and require funds and advisers to provide more specific disclosures in fund prospectuses, annual reports, and adviser brochures based on the ESG strategies they pursue.”
As such, lawyers working in this space need to have a good understanding of the market, according to Mr Rumboll, who said there were a number of challenges capital markets lawyers and firms need to rise to.
“In addition to strong technical legal knowledge, successful lawyers working in the capital markets have a sound understanding of accounting and the capital markets themselves. Clients value advice that not only reflects the applicable legal framework but also reflects how the capital markets work in practice. For example, we recommend our lawyers understand how listed entities are valued, as well as the operational aspects of how the markets operate and the correlation with how transactions are executed,” he said.
“The greatest challenges centre around the cyclical nature of the capital markets and our people. On the first, you need to be nimble, stay across market conditions and focus on your client and your pipeline as the market can and does change quickly. Secondly, you need to be focused on making sure your people are challenged and supported so that they have an environment in which they can thrive.”
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
