EU investors and borrowers split on Brexit impact

Sentiment towards Brexit is polarised, but the general outlook for European alternatives is positive, a study shows.

A large proportion of alternative investors view the UK’s vote to leave the EU positively as it is likely change to the European banking landscape, according to new research published by law firm Allen and Overy.

Forty-three percent of investors surveyed for the Funding European business: strengthening alternatives report said Brexit provides opportunities to them, while 29 percent said it would have no impact.

Borrowers were less upbeat about the outcome of the referendum, with more than two-thirds of those based in the UK saying it has hindered their ability to tap into alternative sources of funding beyond their home borders. Almost half said it has put their plans to secure alternative financing on hold.

The countries closest to the UK geographically also seemed more downbeat, with 53 percent of French and 37 percent of Benelux corporates saying it would limit their opportunities to obtain funding. Forty-three percent of companies in France saying it caused them to put their plans on hold.

This contrasts with Italy, where half of borrowers say Brexit is likely to aid their efforts to secure funding from alternative providers.

More generally, the results point to a positive outlook for alternative assets. Europe-based corporates increased the proportion of alternative capital in their funding mix. It now accounts for 33 percent of funding, compared to 30 percent in 2015.