Brexit fails to dent investor confidence – exclusive

A survey from Elian, revealed exclusively to PDI, shows almost three-quarters of LPs maintaining or increasing their private debt allocations.

Institutional investor appetite for private debt has remained remarkably strong following the UK’s June vote to exit the European Union, according to a new study from fund services provider Elian.

The firm found that 73 percent of investors surveyed were planning to either increase their private debt allocation or maintain it at the current level.

Despite the Brexit vote, more than half of investors (54 percent) said they expected the continued expansion of the private debt market over the year ahead. However, some negative impact from Brexit may be deduced from that fact that, before the vote, this figure was 60 percent.

Moreover, issues around regulation – in particular as a result of Brexit – were cited as the biggest challenge for private debt by 60 percent of respondents.

It appears that the biggest factor in the rosy future tipped for private debt post-Brexit is the performance it has delivered to date. Some 70 percent of investors said their private debt investments had met or exceeded expectations, while only 13 percent said they had fallen short.

“Our report underlines that Brexit has done little to dent investor confidence in private debt as investors increasingly appreciate its ability to deliver steady levels of income in an environment dominated by political uncertainty and low interest rates,” said Paul Lawrence, group head of funds at Elian.

Elian is a specialist in fund and corporate services, capital market solutions, private wealth and employee benefit solutions.