'Good number' of private equity firms explore leaving London


Michael Collins, the head of Invest Europe, said a “good number” of firms were actively investigating moving operations to destinations including Luxembourg or Brussels.

Speaking at the SuperInvestor conference in Amsterdam on November 17, Collins said: “Not everybody is ready yet to push the button to go, but they are certainly doing the due diligence, so they can make the move quickly.”

The UK government has said it will make its formal request to leave the EU in March next year, after which the UK will depart in 2019, but Collins said he believes the negotiations are “simply too complex to achieve in two years” and they potentially “could get very very messy”.

He said: “The worst case scenario from the perspective of UK-based fund managers is that they wake up the day after Brexit has happened with no deal in place and [having no idea] about how they can fundraise in continental Europe.”

Speaking on the same panel, a senior executive at buyout firm CVC Capital Partners also said securing its “passport” to operate on the continent is an important priority.

Marc St John, head of investor relations at CVC, said: “We are raising a fund next year and about two thirds of our capital comes from Europe, and it’s important we can get access to that.”

Collins added that buyout firms are facing uncertainty for their portfolio companies – especially if they operate internationally. He said: “If you are part of a complex EU supply chain [and] you wake up the morning of Brexit day and the UK is no longer part of the customs union, [then] just what happens at the border physically to those goods?

“There’s a real nightmare scenario here if you just don’t know how you [can manage your businesses and portfolio].”

However, St John said that CVC did not foresee any problems for its portfolio companies, and added that although Brexit will be causing “some dislocation”, the firm sees it as an opportunity.

St John did express concern about the elections taking place in several European countries in the coming year: “As these things are starting to line up; Italy, France, Germany, Holland, if they do start of go off-piste we are going to have to figure out how we can manage this from a risk management perspective.”

He added that if these elections go “in a non-traditional fashion… things could capsize”.

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