 Welcome to JSA TV Europe and our live today event on 2023 predictions. I'm Jean-Marc Liman. Joining me today is Barry Cross Who is the global lead of data sensors that is in the digital infrastructure practice at BCLP? Barry always a pleasure speaking to you Nice to you too. Let's shout through the biggest regulatory and legal challenges and changes That the sector has seen this year. So I mean, I'll give the floor to you Talk us through everything that has been going on over the last 12 months Across Europe, UK The practice that you covered basically Yeah, I mean that what what a what a year it's been we've seen massive global Changes and and some real tremors going through the through the world and I guess where do you start the pace of change? Has never been quicker in in the world generally and in the digital space in particular and Interesting on the regulatory side the industry is often impacted by changes that aren't targeted specifically at the industry And a good example of that is obviously energy and all the challenges that energy has has faced and in some ways quasi Regulations and we just need to look at the various moratorium They're being on data-sensitive development either official or unofficial ones Amsterdam comes to mind as well as as Dublin Ireland people been talking in the German market as well about the limitations that are being placed on data-sensitive element But in some ways, I think in this year the the regulatory impact that jumps at me the most is sanctions You know and that's possibly one that people wouldn't have thought of but sang the sanctions that we've seen Have such a pervasive impact across everything that we've been doing the care that one has to take when undertaking M&A Just no one investment financing to ensure that you're not reaching sanctions your your supply chains The actually the the implications of sanctions go far wider than people Realize and indeed we've been involved in transactions in Europe where ultimately those transactions transactions have Fallen apart because of a concern that there may be a sanctions issue in relation to those transactions With those deals More tourism Europe No, they're in mainstream Europe as well And it can be as simple as there's just a customer or a supplier where there's a question mark and depending on the risk Approach of the individual funder or the investor There's a decision to be made what what view do you take on on that? Can you get the information that gets you comfortable and not get the information that gets you comfortable? Okay, interesting. Um, I mean maybe build off a playing question that doesn't have an answer at this stage at this time in place but How do you expect that to change next year? Is it too early to talk about even those things? Well, it's a it's it's very hard to predict where we're going to go Um in terms of further sanctions, I guess Hopefully that's not going to be necessary. I think in the wider regulatory sphere this this seems a little doubt that that ESG Sustainability remains very high on the agenda is clearly no longer simply for the data center space anyway about purely power water is Becoming an increasingly important factor and we had the announcement in in the uk around temps water looking into water consumption, I think With the collapse of ftx Crypto is now very much under the under the limelight will we see more regulatory action taken in relation to to crypto as a result? And and then it's important to recognize that the data center space Some of the biggest players in them have much wider businesses are hyperscales in in particular And to what extent are those businesses going to be under the microscope from a regulated perspective? The competition issues that that are always being talked about And then there's the foreign direct investment and the controls on foreign direct investment We've already seen the impact of that Over the last year, but I think that that is going to be a theme that is going to Continue there is a level of protectionism coming into the world That is driven by concern over Should we say unfriendly foreign players? but also I think a more nationalistic attitude that we're seeing across the world Obviously, we've had brexit in in the uk But even within europe itself the individual countries are each looking at their own protectionist regimes and trying to work out what what do they need to do to protect themselves And to protect jobs and to protect their own economies in a very challenging world I mean the the landscape has really changed over the course of this year To levels we haven't seen in decades. So it will definitely be There'll there'll be a lot of things skating down towards the data center space next year And from all the competition we've been having regulatory does seem to be a big topic For next year with everything out of brussels It basically mentioned the hyperscale is And how because they do have a far-reaching business model It's not just data centers that kind of just is the base of the wider business But the EU does like a little bit of their pieces sometimes Especially when it comes to data protection um, how would you expect that to change and Not change, but like how do you expect it to go next year? Are we going to see brussels trying to bite a little bit out of facebook or meta? Out of google microsoft A little bit more we have all these sovereign clouds coming up in europe as well. We have guy x Which in part is meant to to fight back some of those guys What's your view in that? I think that There there is a there is Clearly a fee. Um, they they are very big They're very big targets from a from a tech perspective from a gd perspective There is clearly A view within Europe regarding sure that the the the individual is protected And and I think it's unlikely that that is going to suddenly stop We'll see escalation of that. I think is a is allowed to predict I shouldn't want to suggest that that we will see an escalation But I I do think we will certainly see more of the same It's a continuing theme that the there is a battle going on to some extent between the raters actually Um, and it's all industry really they're struggling to work out What is the right level of protection? And getting the back you've got to remember that that these businesses are Really integral to society and that means integral to the So we we have a very very very difficult line to tread In the world today in terms of making sure that we don't strangle commerce in the name of What we think is the individual privacy individuals right incredibly important, but uh, but We also need to ensure that we can have trade as well on exactly the line that the the EU are trying to get right Okay, and then based on the work that you're doing and maybe what you've got coming up Next year. How have things changed around sustainability? You've already briefly mentioned um sustainability and regulation especially around sustainability um, but the constitution On renewables and sustainability esg changing a lot And there's more regulation coming in especially in the second half of next year How are your clients or the the customers you work with? Addressing those or reacting to those is it making life a lot harder? It's not making life more interesting um What what we're certainly seeing is the the market particularly around the the funding The funding the funding market is maturing. Um, I think it's important to understand That there are different types of of funding and and investing on a on a green basis You obviously have the the concept of the green loan, which is generally more project Aimed at a specific project as opposed to more sustainability link loans Um, which are more about making the the borrower more sustainable through through incentives Uh, fundamentally sustainability is really hard. It's really challenging and because if it was easy We wouldn't be having lots of global conferences trying to work out how on earth Do we do what needs to be done in order to fundamentally save the planet? And it's hard because it's also very difficult to measure. Um, and and everything has its own challenges What does success look like on an individual basis? And um, frankly, what happens if it's if an individual project Or a loan seeking to improve sustainability Isn't successful and I think all all the regulations around it Are there for that purpose to try and ensure that there is a level of honesty Um And it does it does create challenges for businesses. Yeah, what I said is interesting It is a further layer of bureaucracy Which is uh, which is important Uh to recognize In terms of what we're doing I think the the clear relationship between data centers in particular as massive power users And the power creators the power generators is an obvious area and work that we've done recently with energy for example In its arrangements with microsoft And are a great example of how power users and power producers come work together To help significantly move the dial in the renewable space and and start achieving Real movement towards the net zero that we need Interesting picking up now on on the practice itself that you will see What's what's the plans for the division in terms of countries teams stuff And so now more on the business side of bclp as opposed to the industry regulation Yeah, so that we've had a we've we've had a great 2022 we've we've grown with significant hires both in France and in germany And and that's paying real dividends for us with lots of new and exciting work flowing in both in the in the digital space But also the the wider tech and power and energy Space as well. I think our our sectoral focus means that we've got great bent strength in the digital space across the corporate finance real estate M&A And we're we're looking to capitalize on that and do more multinational deals working with our preferred firms in in all the other jurisdictions And and unlike I think a lot of our firms in the space where the focus is very much at the M&A High level we we're looking at both the M&A of finance and at the asset level We like to get our hands dirty quite literally in terms of the Feeling the the assets working on those assets as they're being developed from the ground up and fundamentally We love this space. We feel we can make a difference in it. We love talking about her and the people in it Because for us it is all about the people the people is what makes the industry and it's people That will ultimately drive the change that we need to see It's still the human capital. That's so important on top of it all Um, I'm going to ask you if there wasn't one question that didn't ask you What would that question be? Oh, that's a that's a real curve ball. Um Normally the question most people want to ask is what what would I be doing if if I wasn't doing this I think a question is is really around what what do we with the current economic climate that we have Where do we see the the sort of the at the M&A space going in the digital space? Because I think that there are questions over clearly the wider M&A space faces challenges Um, so it's it's whether or not those same challenges that we felt in in the digital space Especially with the cost of capital, um And then I guess the last question is what would you be doing if you weren't doing this? I honestly, um, you wanted to be asked that question Yeah, I know if it wasn't If if if I could literally do anything I wanted I'd probably Boringly enough be spending my time sitting learning Jewish law More than anything else But if I if it was a career change I'd probably stay in the data center industry and probably be involved in in building data centers because I love it. I think it's great Okay, I was just playing for something more like music cinema something completely I'm far too uncultured for anything like that. Yeah Oh, well join the group Very as always is a pleasure speaking to you As for our viewers, thank you for tuning in to JSA TV live Don't forget to check our social channels for more content until next time. Happy networking Thank you