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Pro-Brexit Hargreaves hit by market woes

Pro-Brexit Hargreaves hit by market woes

Pro-Leave campaigner Peter Hargreaves has said he does not regret the decision to support Brexit, despite losing approximately £400m as a result.

In the morning after the result was announced, Hargreaves Lansdown, the FTSE 100 wealth manager he founded, saw its share price fall from 1,389 to 1,166, registering a more than 214 percentage point drop within hours of the result.

The FTSE 100 held up relatively well over Monday (27 June) and Tuesday (28 June), compared with the FTSE 250.

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However, at the close of play on Tuesday (28 June), despite a stronger day’s trading on the blue-chip index, Hargreaves Lansdown shares still closed down at 1,147.

Mr Hargreaves, who together with Stephen Lansdown founded Hargreaves Lansdown from a bedroom in 1981, is understood to have donated £3.2m to the Leave campaign, writing 15 million letters to people in the UK encouraging them to leave the European Union.

The letter stated: “I urge you to listen to real people and entrepreneurs who create wealth, not heads of big institutions whose cushy lives will be disrupted by change.”

In 2010, when Mr Hargreaves stood down as chief executive of the Bristol-headquartered firm, he received £18m in payouts from dividends.

He owns nearly a third of shares in Hargreaves Lansdown, totalling about £2bn.

But since the result was announced, the share price has fallen from £13.89 to £10.56, wiping out £400m from his holding.

On Friday (24 June), FTAdviser revealed the initial downward impact of the Brexit vote on wealth managers, including Hargreaves Lansdown and St James’s Place.

By lunchtime on Friday (24 June), Hargreaves Lansdown’s share price had tumbled 11 per cent, while St James’s Place was down more than 13 per cent.

In the immediate aftermath of the market meltdown, Ian Gorham, chief executive of Hargreaves Lansdown, moved to allay investor fears over the financial stability of the firm.

He said: “The result was unexpected but we see no particularly notable immediate implications for Hargreaves Lansdown.

“As a financially strong UK business we are in an enviable position. In the short term there will be uncertainty that may depress markets and particularly financial stocks, as we have seen - although after the initial shock, markets have recovered substantially as people come to terms with the vote.”

He added when times are uncertain, “reliable, secure, well known and well respected services such as Hargreaves Lansdown are attractive to investors as the place to go”.

Mr Gorham added: “It will take time for the results of the vote to play out in full, but I see no reason why both our clients and our business should not continue to prosper, whether inside or outside the EU.”

Mr Hargreaves was contacted but has not responded to FTAdviser by the time this article was published.