Most UK investors unfazed by Brexit, survey shows

Private equity investors are more concerned about a change of UK government than a hard Brexit impacting investments.

City of London by night
Private equity industry professionals are far more concerned about a possible change in the UK government this year than a hard-deal Brexit, according to a new survey.

Change of government top concern for half of investors

The research, conducted by independent financial risk adviser JCRA, also found that 90 per cent of respondents in the private equity industry were actively focused on making new investments in the UK in 2019."None of the respondents were concerned about higher interest rates as a risk to their investment appetite in the UK or the availability of debt finance in private equity, although one in five were anxious about currency volatility/sterling weakness," said JCRA.A no-deal Brexit was considered the biggest risk to their to their "investment appetite" by just 17 per cent in the survey - fewer than half the 48 per cent who considered a potential change in government to be the most serious problem.

Investors still committed to UK despite uncertainty

Benoit de Bénazé, head of private equity at JCRA, said, “Our research demonstrates that private equity professionals are very concerned about the impact that a change in the UK government will have on the industry."It is very encouraging to see that the industry is still committed to the UK despite market uncertainty and that there is very little concern about the prospect of higher interest rates in the near future. The response on current concerns chimes with our own experience and client inquiries.“International expansion has moved up the private equity sector’s agenda. With market volatility and geopolitical risk likely to remain on the radar in the coming year, our clients are benefiting from our advice to retain some flexibility in their hedging approach.”In a parallel survey conducted by JCRA among real estate investment professionals, 58 per cent most feared a change in government with only 15 per cent considered a no-deal Brexit as the biggest risk.

Property investments are high on the agenda

The research showed that 92 per cent of respondents were actively focussed on making new property investments in the UK this year, with none concerned about currency volatility and fewer than one in ten anxious about higher interest rates.Shripal Shah, head of real estate at JCRA, said, “Uncertainty around planning policy and real estate taxation, such as stamp duty, are big drivers for this asset class. We were interested to note, however, that the industry is still committed to the UK despite ongoing Brexit uncertainty, the prospect of potential interest rate hikes and currency volatility."Perhaps more surprising is the sanguine view on the availability of debt finance. Many new lenders have come into the market in the past few years, including institutions and challenger banks, but it feels like debt liquidity could have reached its high point in the cycle already.“The general consensus is that the European real estate sector is in late cycle. Valuations are high and there is a scarcity of attractive new opportunities. The continued trend towards alternatives including residential, hotels, flexible offices and student housing is a theme for 2019."Enter the 2019 Relocate Awards in-text bannerSubscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory

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