Posts

XM PHOTO

We wish you a Merry Christmas and a Happy New Year

We would like to thank you for working with Advisory Excellence throughout 2018 and hope you and your colleagues have a wonderful festive break.

Our offices will be closed from 1pm on Friday 21st December and will re-open on Monday 7th January 2019.

Should you need any urgent help over this period, our helpdesk (+44 (0) 20 3137 6198) will be open as usual.

We look forward to working with you in 2019!

POA PHOTO

A look at Kentucky’s new Power of Attorney statutes

Kentucky’s Power of Attorney (“POA”) laws just received an update. Effective July 14, 2018, Kentucky adopted portions of the Uniform Power of Attorney Act (2006) drafted by the Uniform Law Commission (“ULC”). Even though Kentucky did not adopt Articles 2 or 3 of the uniform act (which address specific powers granted to the agent and a sample form), the new statutes will provide much needed clarity in replacing our previously sparse statutes.

Generally speaking, a POA is an instrument by which a person (called, the principal) designates another (called, the agent or attorney-in-fact) to deal with the principal’s property and act on the principal’s behalf, either out of necessity or mere convenience. Often, a POA will be designated as “durable,” meaning it remains in effect even after the principal loses the capacity to manage his or her property.

POAs are governed by state law, which can mean that a single instrument can be interpreted in very different ways from one state to the next. The ULC has promoted the adoption of a uniform law across the country in an effort to reduce these potential inconsistencies for principals who move from one state to another or own property in multiple states. According to the ULC, Kentucky will join 26 other states that have already adopted portions of the uniform law, meaning a POA drafted to comply with the new Kentucky law should be interpreted similarly in a majority of states.

Kentucky’s new statutes are located in Chapter 457 of the Kentucky Revised Statutes (the “KY UPOAA”) and they replace KRS 386.093. KRS 386.093 was a bare-bones statute that dealt with only three issues related to POAs: (i) durability, (ii) the default method of determining a principal’s incapacity, and (iii) when an agent is authorized to make gifts of the principal’s property.

On the whole, the new laws adopted in Kentucky will provide substantially more guidance on the drafting, interpretation, and use of POAs than did KRS 386.093. Below are some of the items addressed in the new statutes:

  • Execution. A POA must be signed in the presence of two disinterested witnesses. This is a change from the prior law and uniform act, which do not require any witnesses. In addition, we recommend that the POA is signed before a notary public so it is an acknowledged POA capable of being filed to transfer real estate and for acceptance by a third party discussed below.
  • Durability and Coordination with Guardianship or Conservatorship Proceedings. Under the new act, a POA is durable unless the instrument specifically states otherwise. In addition, a principal may nominate a person for consideration by the court to serve as the principal’s guardian or conservator, if necessary. However, in a break from the uniform act and prior law, the POA terminates upon the appointment of a guardian or conservator unless the court specifically provides that it shall remain in effect.
  • Co-Agents. If a principal designates two or more persons to act co-agents, each co-agent may act independently unless the POA provides otherwise. This is different from the typical rule that require co-agents or co-fiduciaries to act by a majority.
  • Agent compensation. By default, an agent is entitled to reasonable compensation. To the extent the principal does not wish the agent to receive compensation, the principal would need to say so explicitly in the POA.
  • Fiduciary duties. At a minimum, an agent must act in good faith, within the scope of the authority granted to him or her, and in accordance with the principal’s reasonable expectations or best interests. However, a principal may waive certain other duties such as the duty of loyalty and to avoid conflicts of interest, which may not be appropriate when a close family member or personal friend is serving as agent.
  • Acceptance by a Third Party. In response to difficulties some agents face persuading banks, insurance companies, or other institutions to accept an otherwise valid and enforceable POA that may not match up with the institution’s internal policies and procedures, a third party must accept a POA that was acknowledged by a notary or may ask for a certification, translation into English, or opinion of counsel regarding authority granted to the agent in the instrument. However, the third party may not require an additional or different form of POA for authority granted in the POA presented.
  • Gifting. Curiously, unlike its predecessor, the KY UPOAA is entirely silent on whether or under what circumstances an agent has authority to make gifts of the principal’s property, except that the agent shall attempt to preserve the principal’s estate plan including the minimization of taxes. Accordingly, unless a specific grant of authority is included in the POA, it may be unclear whether an agent is authorized to make gifts.

Any POA validly executed in Kentucky prior to July 14, 2018, will continue to be valid under the new law. However, the new act will apply a judicial proceeding concerning a POA commenced on or after July 14, 2018.

Contact a member of SKO’s Trust and Estates practice to discuss how best you can use this opportunity.

MA PHOTO

Mid-stream mergers and acquisitions for Q3 of 2018

A combined value of US$91.9 billion in mergers and acquisitions (M&A) was announced in Q3 of 2018. This was an increase of 21% from the US$75.9 billion in M&A deals announced in the previous quarter. The number of M&A deals decreased by 20% from 102 in 2Q18 to 82 in Q3 of 2018, according to GlobalData, a leading data and analytics company.

The company’s latest report: ‘Quarterly Midstream Capital Raising Review – Q3 2018’ states that, of the total M&A deals, 58 deals, with a combined value of US$83.6 billion, were domestic acquisitions and the remaining 24, with a combined value of US$8.2 billion, were cross-border transactions. A quarter-on-quarter comparison shows a 12% decrease in cross-border transaction values in 3Q18, compared to US$9.3 billion in 2Q18. However, domestic transaction values increased by 26% in 3Q18 compared to US$66.5 billion in 2Q18.

Energy Transfer Equity’s (ETE) agreement to acquire the remaining stake in Energy Transfer Partners (ETP) for a purchase consideration of approximately US$60.4 billion was the top deal registered in 3Q18. Another landmark deal that was recorded in 3Q18 was Enbridge’s agreement to acquire all of the outstanding public Class A common units of Enbridge Energy Partners, all of the public outstanding shares of Enbridge Energy Management, and all of the issued and outstanding shares of Enbridge Income Fund Holdings, for a purchase consideration of US$7.1 billion.

Americas remained the frontrunner for M&A registering 33 deals, with a total value of US$82.1 billion in 3Q18. Cross-border activity in the region decreased from 9 in 2Q18 to 6 in 3Q18, while domestic acquisitions decreased by 43% from 47 deals in 2Q18 to 27 in 3Q18.

Europe, Middle East, and Africa accounted for 37% share in 3Q18, comprising 31 acquisitions, of which 10 were cross-border and the remaining 21 were domestic acquisitions. The Asia-Pacific region accounted for 20 global deals, or 24% in 3Q18, of which 10 were cross-border acquisitions and the remaining 10 were domestic acquisitions.

Green Finance PHOTO

Driving ambition in green finance

The transition to a clean, low carbon and resilient economy is a multi-billion pound investment opportunity and we want UK businesses to take full advantage of it. The UK has long been regarded as a leading global financial centre, with a world leading stock market featuring nearly 80 green bonds listed on the London Stock Exchange. We are determined to cement the UK’s position as a global hub for investment in clean growth.

Since setting up the Green Finance Taskforce, the government has been taking concrete steps to strengthen our green finance capability. The government and City of London will co-fund a new Green Finance Institute that will act as the focal point for future UK green finance activity. The government has also announced changes to pensions regulations so that trustees will have to set out how they consider the financial risks and opportunities arising from climate change.

And the government has now committed to build on the Green Finance Taskforce report by publishing the UK’s first ever Green Finance Strategy in Spring 2019. This will set out the steps we are taking to attract the investment we need into our clean economy and to cement the UK’s position as a global leader, including:

  • supporting developing countries through their low carbon transition
  • integrating green principles across the financial services sector

Raising awareness & increasing engagement in Green Finance

As part of Green GB Week there will be a dedicated Green Finance events programme with activities spread across the week. The aim of these events is to raise awareness of the green finance agenda and the role of financial services in unlocking investment into environmentally and socially-beneficial technologies and infrastructure in the UK and internationally.

These events will reach a broad audience including consumers and young people, as well as organisations across the financial sector including regulators, insurers, pension funds, asset managers, legal firms and retail banks. The official Green Finance Day agenda (today Wednesday 17 October) includes:

  • a Market Opening at the London Stock Exchange with a speech from John Glen, Economic Secretary to the Treasury
  • a full day programme at the Tate Modern coordinated by HSBC, including sessions on women in sustainable finance, greening your pension fund, integrating climate risk into investment decisions and building capacity in emerging markets
  • a Climate Resilience Summit led by Willis Towers Watson

On Friday 19 October, during Green GB Week, the Financial Conduct Authority will lead a half day workshop on supporting green finance innovation, and BNP Paribas will host a careers event to highlight different finance career opportunities to students interested in sustainability.

Catalysing investment in Clean Tech

The government will be investing up to £20 million alongside at least £20 million from private investors in a new venture capital fund called the Clean Growth Fund. It is only through innovation, nurturing better products, processes and systems that we will see the cost of clean technologies come down. This new fund will aim to catalyse the market and leverage private sector funding to ensure these innovative clean technologies can bridge the valley of death and achieve impact at scale. On 17 October, we published a Request for Proposals for fund managers.

Boosting investment in green infrastructure

BEIS is working with the Infrastructure and Projects Authority to explore how best government could produce meaningful data setting out which infrastructure projects can be considered ‘green’. This would increase transparency, illustrating the government’s commitment to leading by example in tackling climate change, and showcasing the opportunities available to investors looking to place funds in green projects.

The government will host a national conference followed by at least 5 regional workshops – bringing together local authorities, cities, investors and civil society to help build partnerships to start delivering the pipeline of projects currently being developed at local level. This will help connect investors and the wider finance sector to local projects, and increase the role that regions and local players can have to boost the development of green infrastructure. The government will be working in partnership with UK100, Leeds City Council and more to set up this ambitious programme of work, which will be delivered throughout 2019.

Supporting consistency & comparability in the sector

The British Standards Institution (BSI) will be developing two new UK-led, internationally relevant, PAS (Publicly Available Specification) documents in Sustainable Finance to increase confidence in, and understanding of, sustainable investments and activities. A new Strategic Advisory Group chaired by Peter Young, Trustee and Chair of the Green Purposes Company, has been established to provide strategic direction for BSI’s wider Sustainable Finance Standardisation Programme. This work was commissioned by ministers in the Clean Growth Strategy and is being co-funded with the City of London’s Green Finance Initiative.

BSI will also be leading a new International Organisation for Standardisation (ISO) Technical Committee to develop international standards on Sustainable Finance, informed by the UK-led PAS work. This demonstrates the prominence of UK thought leadership globally, and will contribute to meeting the objective we set out in the Industrial Strategy to become the standard-setters in green finance.

Global leadership & building capacity in emerging market economies

UK leadership on green finance is further demonstrated by the new UK PACT (Partnering for Accelerated Climate Transitions), a £60 million BEIS-run technical assistance programme to share UK skills with partners around the world. The first UK PACT projects strengthen collaboration between the UK and China on green finance, with a focus on harmonised standards for green bonds, analysis of green asset performance, advice on TCFD implementation and supporting the set-up of a new UK-China Green Finance Centre.

EY PHOTO

How businesses can make smarter energy decisions

Ever since the Intergovernmental Panel on Climate Change and United Nations Framework Convention on Climate Change were established, the UK has been on a journey – a journey to become a low-carbon nation. The recent announcement of the Streamlined Energy Carbon Reporting scheme (SECR), designed to help businesses as they become more energy conscious, is just the latest stage in this transition.

The SECR is a proposed new reporting scheme from the Government. It is set to replace the Carbon Reduction Commitment (CRC), which is due to end in 2019. It aims to use energy efficiency as a mechanism to help increase business productivity. And it will also improve the security of energy supplies, as the goal is to reduce current use by at least 20 per cent before 2030.

So who will this affect and what will it involve?

SECR is aimed at companies with at least 250 employees or an annual turnover greater than £36m, as well as an annual balance sheet greater than £18m. The number of companies reporting into the SECR will include those in the Energy Saving Opportunities Scheme (ESOS), taking the number of businesses involved from 1,200 to 11,900.

If you fall into this category then you’ll be automatically entered into the scheme and your energy use, carbon emissions and energy efficiency actions will be made publicly available, with a suitable intensity metric for reference.

What does this mean for these businesses?

For those who aren’t already on their energy efficiency journey, SECR will likely mean additional administrative costs. But if 20 per cent improvements in energy efficiency can be achieved, that can have its own financial advantages.

So what can businesses do?

An energy management system that encompasses people, process and technology will make reporting for regulatory purposes a much smoother process. But companies should go back to the basics of energy management and analyse their operations to understand the meaningful and sustainable changes they can make.

Here are our six steps to help:

Step 1 – Get everyone involved

Start everyone from across your business talking about energy. Make sure to get buy-in on any new initiatives from your senior management. After all, without their commitment, energy management may falter and can be marginalised.

Step 2 – Write an effective energy policy articulating your organisation’s commitment

This should: set an objective, define targets, develop an action plan, establish accountability, ensure continuous improvement and ensure compliance.

Step 3 – Assess your energy performance

As they say, “to measure is to manage”. Understand your past and present energy performance in order to establish benchmarks and begin understanding your energy use patterns and trends. SECR will be a good starting point.

Step 4 – Conduct energy audits

This will help you identify areas of energy savings within your organisation, whether this be by engaging staff, streamlining processes or installing energy efficient technology. Perhaps all three. So dust off that ESOS report or energy survey or perhaps take a fresh look and audit all aspects that affect energy performance: people, process and technology.

Step 5 – Prioritise

Make sure to prioritise your projects and get them done.

Step 6 – Monitor the benefits

Keep an eye on the results of your projects and communicate these to your senior management. It might make justifying capital expenditure easier in future if your energy projects have a proven record of delivering savings. So, sit back, relax and reap the rewards…but don’t get complacent, always strive to improve.

Ultimately, the best thing businesses can do is to get on board the energy efficiency band wagon as soon as possible.

Energy efficiency is beneficial to all businesses, including SMEs, as it removes unnecessary costs from your business. By understanding where your starting point is, you are already on your first steps to helping the UK’s clean energy agenda, as well as becoming a more cost-effective business.

PM new PHOTO

Who’s switching jobs? People moves for October 12th

The latest news for People on the Move, including insights and opinions from employment experts around the globe.

Octopus Property

Specialist property lender Octopus Property, part of the Octopus Group, announced the appointment of Paula Purdy as business development manager (BDM), north of England, reporting directly to D’mitri Zaprzala, Head of Sales. Paula’s appointment follows on from the three regional BDM hires announced last month, with representatives now established across the UK. Paula brings over 17 years of residential, commercial, buy-to-let and bridging lending experience. She joins Octopus Property from Shawbrook Bank, where she was head of sales, residential mortgages, increasing business and raising Shawbrook’s profile amongst intermediaries. Paula will be responsible for deepening relationships with introducers, alongside building new ones, in and around major North of England cities including Chester, Liverpool, Crewe and Warrington, leveraging Octopus Property’s residential, commercial and development product range.

White & Case LLP

Global law firm White & Case has expanded its global project finance practice with the addition of Simon Caridia as a new partner in London. Simon focuses his practice on debt financings for infrastructure M&A and private equity transactions. He advises industry sponsors, infrastructure and private equity funds, commercial bank lenders, multilateral agencies, institutional investors and host governments on brownfield transactions and greenfield projects, including acquisitions, refinancing’s, restructurings, project finance and public-private partnerships. He joins White & Case from Herbert Smith Freehills, where he was a partner. “There are very few lawyers in the London market who can match Simon’s reputation, experience and market knowledge in relation to advising clients on debt financing for infrastructure M&A and private equity deals,” said White & Case partner Mark Castillo-Bernaus.

Houlihan Lokey

Houlihan Lokey, the global investment bank, yesterday announced that David Brock had joined the firm as a managing director in its industrials group, focused on the building products sector. He is based in London. David joins from Jefferies, where he was a managing director and head of the construction and building materials group. Prior to Jefferies, he was also a managing director and head of the construction and building materials group at Deutsche Bank. David’s previous experience also includes equity research roles in the building products sector at Credit Suisse and HSBC. “I am excited for the opportunity to be part of this momentum and to be joining the market-leading Industrials team,” David said.