Guillaume Di Pizzio, chief investment officer at Dauphine AM, has noted that Brexit uncertainties have resulted in reconsideration of UK asset exposures.
"The first impact of Brexit concerns the ineligibility of investment funds following the loss of a European passport."
He stated that "this risk is irrelevant for their allocations, because UK-based financial institutions have already based their mutual funds mainly in Luxembourg and Ireland".
"The second, more indirect impact, is that of a hard Brexit which is not priced into English securities and bonds. The markets completely obscure a 'lose-lose' situation for the EU and the UK. In fact, equity and bond risk premiums have been heavily compressed on English assets: the level of risk becomes asymmetric with poor earnings prospects but a significant profile drop. So, we are pretty much absent from UK exposures, likewise with European companies or sectors that would also be impacted by, for instance, GETLink or the European banking sector. This cautious approach has done very well and has been taken onboard by our customers and partners."