This would leave non-EU asset managers, most of whom currently passport their UCITS funds to the EU through London, without access to the EU market.
Last week, Columbia Threadneedle was the first asset manager to take concrete action: it announced it would expand its asset management operations in Luxembourg “to enable an asset management presence in the EU”. Though most international asset managers who currently passport their funds to the EU through the UK face similar risks as Columbia Threadneedle, they have tended to adopt a wait-and-see approach or shroud their plans in mystery.
Neuberger Berman, for example, said “it is still too early in the process for us to specify any plans”, while others simply refused to comment. UBS AM, which has its EU headquarters in London, suggested its Swiss roots make it well-prepared to deal with Brexit-induced turmoil. “As a Swiss organization, we’re used to preparing our business for change in line with the democratic will of the public,” said a spokesman.
A UK exit from the single market, as promised by the Leave campaign in the run-up to the referendum, will probably see financial passporting rights repealed. So asset managers would probably do well to put plans in place to move some of their asset management operations from the UK to elsewhere in the EU to prepare for this eventuality.