Hedge Funds and Private Equity Firms Contemplate Leaving London

Some of the large asset managers have already laid out plans to set up alternative European operations.

Britain’s decision to leave the EU has had a fair number of repercussions, particularly on businesses contemplating a move away from the capital. Amongst those are some of London’s hedge funds and private equity managers who are now starting to look at shifting their operations into continental Europe.

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Brexit will dampen the London marketplace so British firms need to become more agile and innovative.

As well as leading the way in fintech, London has long been the base of choice in Europe for most hedge funds and private equity groups. However, if the UK leaves the EU, asset managers could find it much more difficult to sell funds to investors on the continent.

Some of the large asset managers, including M&G and Columbia Threadneedle, have already laid out plans to set up European operations or move some staff to some EU locations to preserve their access.

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A recent survey by research firm Prequin which polled 142 alternative asset managers on leaving the UK found that 7 percent of them are thinking about moving their operations outside of Britain and another 17 percent are unsure whether to change where they are based.

The survey also found that nearly a fifth of fund managers planned to reduce their investments in the UK over the next 12 months as a result of the referendum.

The re-location of alternative asset managers away from the UK is said to be of concern to economists and business executives who fear a loss of influence at an international level after Britain’s decision to leave the EU.

Carl Sjostrom, head of executive reward for Europe at recruitment company Hay Group, said: “Many alternative asset managers were considering boosting their presence in the EU to ensure they could continue distributing funds on the continent. I think Brexit will dampen the London marketplace so British firms need to become more agile and innovative.”

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