Brexit impact on income remains questionable for hedge funds

New research finds that the majority of hedge funds are unaware of how revenues will be impacted by Brexit.
By Paul Walsh

A majority of hedge funds have an uncertain view on the impact of Brexit on revenues according to a new survey.

According to research from TABB group, 42.86% of surveyed hedge funds are uncertain of the impact of Brexit on revenues while 28.57% feel that it will cause increased revenues and a further 28.57% believing that it will have no impact. 

The results show that hedge funds are less optimistic than trading venues with 41% of proprietary trading firms believing that Brexit will cause an increase in revenues.

A similar study conducted by Prequin in the immediate aftermath of June 23 showed hedge funds held a bullish attitude towards Brexit with 31% and 23% of surveyed participants stating Brexit would be good for performance in the short-term and long-term respectively.

The UK’s decision to leave the European Union has caused uncertainty among fund managers with many deciding to reassess their presence in London.

Many firms are also concerned that UK-based funds could be deprived of the distribution benefits in the EU if Brexit negotiations face delays.

Other figures from the TABB survey revealed that hedge funds are split on the greatest potential impact of Brexit with 57% considering the cost of trade barriers to have the most impact while 43% of respondents stress that regulatory bifurcation poses the greatest concern for hedge funds.

Additionally, only 29% of surveyed hedge funds feel that the UK’s decision to leave the European Union will be reversed.

Please note- Percentages concerning hedge fund responses in paragraph two were amended following clarification from TABB group as to why previous figures totalled 101%.

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