Brexit “not a game changer” for asset managers

The UK's decision to leave the European Union is “not a game changer” for the asset management sector, though fund groups affected by the summer's outflows may have to work harder than ever to attract investors back to them, say analysts at Cerulli Associates.

The firm says it does not believe passporting and Ucits-labelling rights, which allow UK firms to domicile funds in Luxembourg and Dublin and manage them out of London, will be withdrawn. Moreover, it expects any new conditions attached to these rights to be minimal.

“The EU would have little incentive to deprive itself of the expertise of Europe's biggest financial centre, or to risk restrictions being placed on the export of EU goods and services into the UK," Barbara Wall, Europe managing director at the firm, writes in the Cerulli Edge European Trends report.

Elsewhere, the report suggests the latest round of central bank interest-rate cuts and quantitative-easing extensions will bring relief to asset managers suffering in the wake of the Brexit vote.

"Most firms are not expecting outflows, which admittedly were very large, to be magically reversed in the next month. However, they have already stabilised and most industry watchers expect the second half of the year to show a more positive trend," said Wall.

Despite market uncertainty there were still 241 equity funds launched in the first six months of 2016, with BNP Paribas Investment Partners alone launching 22, and Edmond de Rothschild nine. However, there were 38% less launches compared to the first half of 2015, which saw 387 launched.

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