Private equity firms hold on to hope of post-Brexit growth

UK PRIVATE equity businesses are holding out hope for growth in their sector in the post-Brexit world, according to new research from Mourant Ozannes.

Darren BaconCROP

The law firm surveyed more than 260 firms worldwide in its research, which discovered that fund launches in the EU have been delayed following the Brexit vote and that professionals expect an increase in UK-based institutional investment, compared to the EU, once the UK has left the European Union, in part due to relaxation in having to follow the demands of the Alternative Investment Fund Managers Directive.

‘It seems that there are hopes for some relief from AIFMD regulation post-Brexit when the UK is outside the EU. Almost 100% of respondents told us AIFMD has made raising funds from EU-based investors more challenging,’ said Darren Bacon, Guernsey-based funds partner at Mourant Ozannes.

‘Couple this with survey results revealing that limited and general partners expect Brexit to result in greater investment from UK-based investors and declining investment from Europe and it’s clear that UK private equity fund-raising will become easier in the post-Brexit environment, while European fund raising will remain challenging.

‘The impact of Brexit has, understandably, been most dramatically felt in the UK and Europe. There was a notable slow-down in fund-raising and transactional work as we approached the day of the referendum and any momentum that still remained was quickly lost once the vote became clear.’

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