UK-based fund houses have begun planning fund and job transfers to Luxembourg and Ireland in the wake of the country’s vote to leave the EU.
Amid uncertainty over the UK’s future relationship with the trading bloc, M&G Investments and Columbia Threadneedle have both highlighted plans to start shifting fund registrations and some staff to locations which remain in the EU.
UK-based asset managers currently rely on the EU’s passporting regime in order to sell their Ucits funds to European customers from London, but may no longer be eligible to do so if the UK’s Brexit settlement sees it leave the single market.
A Columbia Threadneedle spokesperson said: “We have begun the process of applying to expand the scope of our Luxembourg-based management company to enable us to establish an asset management presence in the EU. This would involve us having some fund managers based in Europe before the UK leaves the EU. We currently have investors in 12 locations globally, so we would expect this to be a smooth transition.”
“We will seek to replicate appropriate funds from our UK-based Oeic range within our Sicav platform. We have done this for a number of funds in the past and it is a relatively straightforward process.”
Similiarly, M&G said it had been expanding its Dublin base over the last year in preparation for a potential vote to leave the EU.
A statement from the firm said: “Work on extending our existing range of funds domiciled in Ireland has been underway for the past year and this is our preferred option to minimise disruption for our European customers.”
Anne Richards, chief executive of M&G said the referendum result would not change its commitment to EU customers.
“We will continue to distribute our products in the [EU] as we have done very successfully over the last 14 years,” she said.
In the build-up to last week’s vote, Investment Adviser reported Ucits-focused fund houses had not made significant movements in preparation for a Leave vote. PwC asset management partner Grant Lee warned there would be “first mover advantage” in registering operations in Dublin or Luxembourg.