Fund managers eye UK assets
Investors have converged on the City of London for centuries. Source: Pixabay
Ireland, Luxembourg and France are eyeing £1.2 trillion in assets managed in the UK for European investors, exploiting the growing uncertainty about the Brexit process and its potential impact on the investment industry.
Rival fund centres to London believe the UK’s status as the European asset management hub for pension and insurance cash is in peril, offering them the chance to attract business.
London’s asset management industry is a world leader in segregated accounts or mandates, individual pots of cash managed for large-scale investors such as pension funds and insurers. These mandates account for £3.3 trillion of the £5.5 trillion managed by Britain’s investment industry, said the Investment Association, the trade body for asset management.
Denise Voss, chair of Alfi, Luxembourg’s fund association, said the tiny nation saw Brexit as a “big opportunity” to increase its share of Europe’s segregated accounts business. It is Europe’s largest fund domicile, with a focus on regulated investment funds known as Ucits.
“Luxembourg could become a hub or at least an important centre for EU segregated mandate business currently managed out of the UK,” said Voss.
Ireland, Europe’s second-largest fund centre, has similar targets. Kieran Fox, director of business development of the Irish Funds trade body, said: “We are doing everything we can to speak to everyone possible in order to ensure Ireland is as ready as it can be to provide solutions to asset managers looking at their options post-Brexit.”
Legal challenges to the entire process are underway in Belfast and Edinburgh.
The Scottish and Northern Irish governments told the Supreme Court that they must give their consent before Article 50, which triggers the process, can be enacted.
The London government launched the appeal against MPs being entitled to vote on Article 50.
The Lord Advocate for Scotland, James Wolffe, told the court that for the London parliament to kickstart Article 50 without the approval of members of the Scottish Parliament “would be unconstitutional”.
Representing Northern Ireland, QCs David Scoffield and Ronan Lavery said it undermined the Good Friday Agreement and the constitutional status of Northern Ireland, which is built on self-determination and consent of its citizens. They have also argued that Northern Ireland’s relationship with the Irish Republic could be drastically changed if the UK left the EU. Questions remain, such as whether a border would need to be established between Northern Ireland and the Republic.