Henderson CEO: Brexit will spur buyside consolidation

Henderson CEO Andrew Formica speaking at FN's Brexit Breakfast event on July 1, 2016

Micha Theiner

Henderson CEO Andrew Formica speaking at FN’s Brexit Breakfast event on July 1, 2016

Firms will try to cut expenses through consolidation with rivals, with the pace of deals starting to pick up next year, said Andrew Formica, chief executive officer of Henderson Global Investors.

The potential for increased merger and acquisition activity is “less because the UK is no longer in Europe but what it means for economic growth and uncertainty,” said Formica, who was speaking at Financial News’s Brexit Breakfast Briefing on July 1.

Finance experts have widely predicted the UK will slip into a recession as a result of the vote to leave the EU. Mark Carney, the Governor of the Bank of England, said on June 30 that fresh economic stimulus measures are likely to be employed in response to the vote. On June 29 Swiss asset manager GAM announced it had agreed a deal to buy Cantab Capital Partners, the $ 4 billion hedge fund.

Other panelists at the event also pointed to the uncertainty resulting from the Brexit vote earlier this month.

While some jobs will “undoubtedly” leave the city, “the extent is all to play for, ,said Simon Gleeson, a financial markets law and regulation partners at Clifford Chance.

Jenny Knott, chief executive officer, post trade risk and information at Icap, said the City must ensure its relationship with Europe remains intact during the negotiations to leave. “This is not the time in my opinion for being bloody-minded [in negotiations with the EU],” she said.

Meanwhile, Edi Truell,a former pensions and investment adviser to Boris Johnson who is chairman of private equity firm Disruptive Capital Finance, said London’s financial services industry should look beyond Europe to Asia and other markets.

“I would advise people to spend more time in the Far East than worrying about whether they can get passported into Latvia. We need to compete against Koreans and Singaporeans. They are the people I want to do business with.”

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