Brexit prompts widespread fund domicile rethink

More than a third of UK-based general partners are considering changing the jurisdiction of the funds they are launching because of uncertainty created by Brexit, according to a survey by law firm Mourant Ozannes.

In total, 41 percent of UK-based respondents and 17 percent of their Europe-based counterparts are re-evaluating their choice as a result of questions over regulation and tax.

The referendum result has also dented confidence in the UK regulatory environment, according to 47 percent of UK-based and 39 percent of Europe-based GPs. Faith in EU regulation has also been negatively affected, according to 33 percent of GPs based in the region.

Despite negative sentiment generated by the Brexit vote, the outlook for the UK private equity market appears more positive than that for Europe.

Almost half (47 percent) of global participants in the survey said the UK’s decision to leave the EU will reduce private equity investments in European companies, compared with a third who believe it will decrease investment in UK companies.

Investment from UK-based institutions is expected to grow and almost two-thirds of North American professionals surveyed predicted increased capital commitments from these investors.

In general, 88 percent of global participants hold a positive outlook on the private equity market over the next 12 months. This increases by five percentage points when UK-based respondents are considered in isolation, and falls to 85 percent for North America-based professionals.