(FREE) Deloitte Global has set up a new centre to provide advice to member firms on the business, financial and public policy aspects of cross-border investments.
Former US Deputy Secretary of Treasury Robert Kimmitt has been appointed as chairman of the Center for Cross-Border Investment (CCBI).
Kimmitt will advise Deloitte professionals on the execution of cross-border mergers, acquisitions, divestitures and other transaction-related activities of clients, including private equity investors, strategic buyers, hedge funds, sovereign wealth funds and state-owned enterprises.
He said the aim is to provide an “unvarnished” view of the facts, which includes the pluses and minuses. The types of transactions where the centre can be of particular assistance are those where the public policy component is every bit as critical as the business and financial component, he added.
“The idea behind it was to help demonstrate the benefits to the global economy of open investment regimes, to try to work with governments on keeping their investment regimes open, and then to draw on the resources of Deloitte to assist clients in how best to approach cross-border transactions,” Kimmitt told the International Accounting Bulletin.
“My view is that any time you do any cross-border transactions you need to do good due diligence, not only around the business and financial component of the deal but also the public policy component. This aspect can pick up a whole range of issues from regulatory to political risk, tax, accounting and so forth.”
Deloitte has hundreds of specialists around the world that focus on services related to cross-border transactions. The centre will allow a more coherent and co-ordinated response to issues around these activities.
Kimmitt observed that cross-border activity has slowed as a result of the global economic downturn but there is still plenty of life in the sovereign wealth fund market. He said investors are now starting to look at opportunities in markets such as the US as signs of recovery emerge.
John Marry, a Deloitte global services director, said the network is building transaction advisory capabilities in the Gulf and Asia-Pacific regions to service the demand generated by sovereign wealth funds.
“Notwithstanding that some of the investments by sovereign entities have proved less than spectacularly successful over the past 24 months or so, there is still a huge amount of capital that is not going to do anyone any good unless it is put to work,” Marry explained.
As part of his role, Kimmitt will also advocate support for free and constructive cross-border capital flow. His diplomacy skills and experience make him an ideal candidate for the role.
Kimmitt has operated at the intersection of business, finance and public policy for more than three decades.
He was the Deputy Secretary of Treasury from August 2005 until January 2009 and a core responsibility of this role was steering US investment policy.
He was involved in drafting the Santiago Principles, which provided rules to ensure sovereign wealth funds were being invested for commercial and not political reasons. Kimmitt was also instrumental in negotiating last year’s US government and EC trans-Atlantic investment agreement.
He has also been the US ambassador to Germany; Undersecretary of State for Political Affairs; General Counsel of the Treasury; and Deputy Assistant to the President for National Security Affairs at the White House.
Kimmitt has served as a member of the panel of arbitrators of the World Bank’s International Centre for the Settlement of Investment Disputes.
Before his most recent stint with the US government, he was a senior international counsel in the law firm Wilmer Cutler Pickering Hale and Dorr.
Kimmitt was also chairman of the international advisory council of Time Warner, where he served as the executive vice president of global public policy from July 2001 to February 2005.
Deloitte’s global managing partner of services Jerry Leamon said: “His perspective will be invaluable as we continue to monitor and evaluate the activities, policies and business strategies of government-controlled financial entities; the impact of actions taken by the US Treasury and foreign governments in response to the global financial crisis and recovery; and other international business trends and developments.”