There was no shortage of media coverage in the lead-up to the UK’s snap election, which saw prime minister Theresa May’s cushy parliamentary majority ripped away from her in one fell swoop.
However, in light of the hung parliament outcome, countless investment professionals were quick to trivialise the political contest.
Hawksmoor Investment Managers CIO, Jim Wood-Smith, for one, called it “a little local issue in the grand scheme of things.”
Rob Burdett BMO multi-manager co-head lamented that the election had resulted in “a lame duck government that doesn’t have a big enough majority to do much except guide us through Brexit.”
With the imminent Brexit negotiations still hanging over the UK like a dark storm cloud and improving economic pictures in other parts of the developed world, is it any wonder that investors in the UK want out?
And hard Brexit or not, has the UK already fallen off a cliff in terms of its importance to the global investment scene?
Rathbones’ head of multi-asset David Coombs has made it clear that he will not be re-investing in the UK – for now.
In the weeks leading up to the general election, he positioned for a Corbyn risk, ditching more domestic focused holdings like Persimmon and British Land and slashing positions in Lloyds Bank and Land Securities.
“From an investment perspective, this is an almost nightmare scenario,” Coombs reflected after the election.
“Many risks have now increased significantly. What chance have overseas companies when deciding to increase their capital investment in the UK? What are the chances that they withdraw? Will the City still be able to attract talent from overseas?” he asked.
