Richard Buxton has said the possibility of ‘Brexit’ is one of three big risks UK equities investors face this year. The manager of the Old Mutual UK Alpha Fund and CEO of Old Mutual Global Investors sees interest rate rises and manufacturing weakness as the other two main worries. “A serious risk facing investors in UK equities is Brexit, the potential departure of the UK from the European Union,” Buxton said. “Worries about this eventuality, and about the future of the UK outside the EU, could put off or delay international investors from allocating to the UK,” he warned….
It is seldom all doom and gloom with Buxton though and in his view each of these clouds has a silver lining. While recognising the danger, Buxton believes Brexit will not come to pass in the end. “I simply do not believe Brexit will happen,” he said. “The British people are too conservative – with a small ‘c’ – to countenance the upheaval such a change would bring. And David Cameron will likely obtain sufficient concessions from Angela Merkel to satisfy the British electorate. My view is that Germany will grant these concessions because she wants an EU that includes the UK.”….
[Source: Portfolio Adviser – Alex Sebastian – January 6, 2016]