The UK private equity industry has just emerged from a remarkably successful year. But these triumphs are being put at risk by the UK’s current Brexit uncertainties. Up until now, the UK’s PE sector – like much of the economy – has been in a state of ‘phoney war’ since the referendum; much of this due to the seemingly endless political trials and tribulations unleashed since June 2016.
Rather than panic or exodus, the general reaction of managers and investors both domestic and abroad over the past two years has been to circle in a holding pattern, awaiting a more concrete prognosis on the future of UK-EU relations before making any major strategic decisions. The shared assumption being that whatever ultimately emerges from the smoke, the UK and the EU will strike some sort of reasonable deal, and that this deal will more or less protect crucial cross-border trade in financial services.
In the meantime, you could be forgiven for thinking it was business-as-usual, or better. However, underneath the positive headlines there could be trouble brewing. Now on the International Financial Law Review (IFLR) website, I discuss the challenges likely to be faced by PE firms in the coming months and how managers should adapt in order to weather any storms ahead.