More than three quarters (77 per cent) of UK fund managers believe that the UK Government should have consulted the asset management industry more before commencing Brexit negotiations, according to a new report from MJ Hudson.
The report, based on a survey of more than 300 fund managers and investors in the UK, Europe and the rest of the world (ROW), also revealed that 80 per cent of UK fund managers do not believe the UK negotiation team has sufficient understanding of asset management in order to deliver a deal that works well for the UK industry; 63 per cent of global fund investors currently investing in the UK agreed.
Matthew Hudson, CEO of MJ Hudson, says: “Following the referendum result, which few in our industry wanted and fewer still expected, managers and investors alike are not waiting for the political vacuum to be filled. Instead, they are already implementing their own plans and setting up new EU offices and teams so that they retain and grow assets under management (AUM) post-Brexit, however it plays out.”
Hudson adds: “The ability to provide financial services from the UK into the EU is critical, not only to maintain the UK’s position as the leading asset management centre in Europe, but also as a world-leading industry for the UK and a significant revenue generator for its economy. As the UK Government and the EU now enter Brexit negotiations, it is not too late for the asset management industry in the UK and the EU to be extensively consulted.”
Thousands of EU funds are available for distribution in the UK and any restrictive marketing and sales rules imposed by the EU on the UK are expected to lead to reciprocal treatment.
Camille Thommes, Director General at Association of the Luxembourg Fund Industry (ALFI) echoed this view in the report: “The negotiation process is not a unilateral, one-way exercise. There is a lot at stake for both sides.”
Every single European fund investor outside of the UK surveyed by MJ Hudson was surprised by the Referendum result on 24 June 2016. European fund managers were only marginally more prepared – 86 per cent had expected the UK to vote to remain in the EU. One Dutch institutional investor remarked, “[I am] stunned – I now have a negative view on allocating assets to UK asset managers. I’m looking for alternatives.”
The reaction from fund managers and investors in the rest of the world was also one of concern. A US wealth manager remarked, “I worry that others will follow similar paths.”
Hudson says: “The Brexit results matter to everyone in asset management, not just those in the UK, but in the EU, too. This cuts both ways. There is uncertainty for European managers and investors outside the UK over whether they can access UK-based funds, as well as sell their own funds within the UK. Asset managers and investors throughout the EU and ROW mostly want to see transparency as well as the reciprocal flow of money and services being maintained. It is in no-one’s interest to take a giant step backward into protectionism as this greatly affects global capitalism, and investment choice especially.”
Hudson adds: “The Brexit negotiations – how long they take and with what results – are uncertain. In the meantime, asset managers and investors are all active behind the scenes, future-proofing their assets under management and ensuring investment choice.”
Full news
© Hedgeweek
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article