European investment in the United Kingdom has more than doubled since 2016, signalling EU investors see a positive outlook in the long-term post-Brexit.
According to S&P Capital IQ data, buyers from the European Union acquired 553 British assets in 2018 totalling $31.1 billion through acquisitions or mergers of companies, stakes in companies, and property.
This is up from the acquisition of 497 assets in 2017 totalling $21.2bn, and 454 assets purchased in 2016 — the year of the referendum — at $13.6 billion.
Most of the money came from France, where just over $12bn was spent to acquire 105 assets, followed by Germany which spent around $5bn to aquire 106 assets.
Spence Baylin from law firm Clifford Chance told The Telegraph that “foreign exchange movements” and so-called “Brexit risk” may have influenced the price of UK assets, but “Beyond pure pricing, investors also have to take a view on the performance of those assets in a post-Brexit environment. Some will take the long view and invest, others will wait and see.”
Nick George from PwC also pointed to the current instability of the eurozone as a reason for European investors to seek a safe harbour in British investment, telling the newspaper, “A lot of Europe has been at or near recession. There haven’t been as good opportunities to invest in Europe as there have been in the UK, which has been performing well.”
The news follows on from reports that the UK’s top ten investors, including Invesco, Aberdeen Standard, Legal & General, Vanguard, and Schroders increasing their share holdings in the UK by over a third in the past three years.
One of those top-ten investors is Norway’s $1 trillion Government Pension Fund, which made a 30-year bet last week on the UK’s Brexit success, with the company’s chief saying that they would continue to invest in British bonds and companies whether the UK left the EU with a soft Brexit deal or made a clean break of the bloc at the end of March.
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