The private equity industry thinks a soft Brexit will help raise funds

The majority of UK private equity and real estate fund managers believe a “soft Brexit”, with looser controls on immigration and market access between the EU and the UK, will help them to raise funds.

The research from Augentius, the world's largest private equity fund administrator, found that 59 per cent of fund managers thought a soft Brexit would benefit fundraising.

A further 22 per cent did not believe the “type” of Brexit would matter, while 19 per cent thought a softer Brexit might actually harm their fundraising capabilities.

The survey of more than 100 investors and fund managers across the world also found that, despite a sense of cautious optimism in the industry, a significant minority of investors in every major region were finding business in 2017 harder than expected. In the US, 41 per cent of fund managers were finding it harder to do business – this was reduced to 32 per cent in Asia and 29 per cent in Europe.

“Going forward, much will depend on how political and macroeconomic tensions end up playing out – managers will be keeping a keen eye on the emerging details of the Brexit settlement in particular,” said Ian Kelly, chief executive of Augentius.

Nevertheless, President Trump's tenure in the White House appears to be having little effect on US managers' ability to raise money. Just 16 per cent reported problems with fundraising, while a further 84 per cent said a further interest rate rise would have a negligible effect on their deal flow.

In Europe too, investors have been desperate to put huge amounts of cash into private equity. Brexit or no Brexit, fund managers with a good track record have found it relatively easy to reach their fundraising targets. Private equity funds have been raising record amounts this year, and often in unusually fast times.

Augentius's survey did also hold promise for the UK's fund administration sector post-Brexit, as the country continued to be the most popular place to domicile funds stealing 35 per cent of the vote. The Channel Islands came a close second while Luxembourg, in third place, was a way behind at 14 per cent.

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