Speaking on the latest edition of the Brewin Dolphin Podcast, the founder and chief executive of the boutique asset manager Fundsmith said that the UK will have “a much better future” if it leaves the European Union. “I think most of the arguments for staying in the EU are really either facile or ‘campaign fear’ (if we leave we won’t be able to trade with Europe on the same terms), he explained.
Smith goes on to say that he believes there will be a lot of disruption after [the Brexit] if it occurs, but that the UK will be “absolutely fine” after, just as it was before.
He went on to explain that the average view of the companies in his portfolio can best be summarised by the CEO of L’Oreal, who said that he thinks he would be rather sad [if the UK exits], but it will make no difference whatsoever. “I think that’s roughly right, in terms of where the portfolio is and how these companies operate,” said Smith.
“Their ability to operate if the UK decides it will no longer be part of the current EU will not suffer significant disruption,” he said. He ends the podcast by saying that, ultimately, a potential Brexit won’t have any effect at all on the portfolio.
“I’ve long held the view that one of the things that will occur in the run up to the referendum will be a fall in sterling. I think the remain campaign will even be happy to try to provoke something of a crisis in the sterling,” said Smith. “Ironically, that would be rather good for us. Most of our companies are not sterling earners.”
Smith has a history of political activism, and already was a fierce proponent of Brexit long before the term was first coined. He stood for Parliament for West Chelmsford constituency in 1997 for the obscure Referendum Party, to try and get a commitment for an EU referendum.
The discussion leading up to the Brexit question centred on the valuation of companies within Smith’s portfolio amid a more difficult pricing environment.