Brexit could see EU fund managers open offices in UK
2 January 2019
Nearly a quarter of institutional investors expect more European-based fund managers to open offices in the UK after Brexit, findings from State Street have shown.
According to “The Impact of Brexit on the UK fund management industry” report, more than one third (34%) or respondents believe there will be an increase in merger and acquisition activity within the fund management sector, driven by European fund managers looking to acquire UK-based firms following the country’s exit from the EU.
Of the 100 institutional and alternative investors surveyed for the report, 22% also expect to see a rise in the number of Asian and US fund managers opening offices in the UK and 15% think non-European based fund managers who already have offices in the UK will increase the number of employees they have as a result of Brexit.
Respondents cited the UK’s investment management expertise and knowledge as the leading reason for fund managers seeking to expand their operations in the UK, followed by the size and growth expectations of the local market.
When asked which fund structures would be most popular among non-UK fund managers in a post-Brexit environment, 44% listed Investment Trusts, while 21% cited Unit Trusts and 20% said Open Ended Investment Companies.
Brian Allis, head of State Street Global Services EMEA product team said of the report: “Our research suggests that, despite the headwinds and complexity that Brexit is causing, the UK is still a hub for a tremendous amount of investment management expertise, and an attractive centre for fund management activity in Europe.”
Allis added: “It is reassuring to see that, however negative the outlook for the UK fund industry may be right now, investors still want to maintain and grow their presence locally.”
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