More than seven in 10 institutional investors see ‘hard’ Brexit – research
More than seven in 10 (73 per cent) institutional investors believe Brexit will be ‘hard’, including 29 per cent who believe it will be ‘very hard’, research by Managing Partners Group (MPG), the international asset management group, reveals.
More than four out of five (82 per cent) also believe the number of UK-based financial services firms generally seeking to establish subsidiaries in the European Union will increase over the next three years due to Brexit. While 44 per cent believe that UK asset managers specifically will probably get to passport their funds into the EU after Brexit, around 30 per cent believe this will not happen.
The full findings of the research will be announced at the Finance Malta 10th Annual Conference due to be held in Malta on May 17 and 18. MPG believes that one of the biggest beneficiaries of Brexit will be Malta because of its EU membership, its efficient regulatory and legal environment and its highly-educated, English-speaking workforce.
Jeremy Leach, chief executive officer at MPG, commented: “Although a sizeable minority in our survey believe UK asset managers will be able to passport their funds in the EU after Brexit, I think this will be unlikely – current members of the European Economic Area such as Switzerland, Liechtenstein and Norway do not have this privilege.
“As such, many asset managers and other UK financial services companies will look to establish a secondary entity somewhere in Europe post-Brexit and Malta should certainly be on the list of serious options. Our survey also showed that respondents believe the most important considerations for those UK companies looking to set up another operation elsewhere are a comprehensive legal and regulatory framework (78 per cent), followed by the tax regime (52 per cent) and economic stability (42 per cent). Malta is exemplary under all of these criteria.”
Kenneth Farrugia, chairman of Finance Malta, commented: “Malta’s proposition as an international financial centre has continued to enjoy momentum, as evidenced by the sustained growth experienced in 2016 and the conduit of international business operations currently seeking an investment services licence through the Malta Financial Services Authority.
“The success of Malta’s financial services industry has been driven by a number of factors, including the presence of a comprehensive regulatory legal framework, the work ethos and skills of the human resources in Malta, the accessibility to the regulator and its pro-business approach, Malta’s cost competitiveness as well as political and economic stability.”
Joe Portelli, chairman of the Malta Stock Exchange, added: “Malta offers a highly competitive, cost-effective solution for any company looking to establish itself within the EU. We are a pragmatically well-regulated, English-speaking financial centre with a hard-working and educated workforce. Setting up in Malta can be done relatively efficiently and highly cost effectively, with costs being considerably lower than other European domiciles.”