Brexit: ‘Make hay while the sun shines’

Brexit negotiations needn’t be an obstacle to fundraising or other fund manager activities, according to a panel at the Guernsey Funds Masterclass held in London on Wednesday.

“I think it’s important for fund managers to make hay while the sun shines,” said Phil Bartram, partner at law firm Travers Smith.

Responding to concerns the UK could lose its financial passporting rights, which allows cross-EU marketing of funds from the country to other EU members under the Alternative Investment Fund Managers Directive, the panel emphasized the National Private Placement Regime was an option in a post-Brexit future.

“The NPPR is predictable and certain for the time being. All of the key European countries for private fundraising have NPPRs and we’re seeing large private funds raise substantial capital across the EU under the regime. In a recent case, we managed to get a fund registered in nine jurisdictions in a little under two months start to finish, so it can be done,” Bartram added.

The NPPR is expected to remain in place until at least July 2018. After this, a third country passporting scheme is likely to be brought into force, although European regulators are yet to make a decision on which countries will be eligible for a passport.

It is uncertain if the UK will get a third country passport post-Brexit, according to keynote speaker Louise Harvey, chairwoman of business advisory FTI Consulting. “The third country passport was never intended to deal with an external player as large as the UK, and is an unattractive prospect for the EU,” she said.

Brexit did not seem a major concern for some GPs and service providers in attendance. “I’m not convinced that Brexit is a present worry, particularly as the UK is still an EU country,” said one private funds tax specialist.

For LPs, however, the worries are greater. One new to market LP said they needed to understand how best to protect their interests.