Chart of the week: How will the US and Europe react to Brexit?

Less than 3% of all UK-focused private debt capital has been raised from within the EU since 2010.


Click here for a larger version


The UK’s decision to leave the European Union sent the markets into turmoil last week, but investors can still seize on the opportunities created.

As Private Debt Investor reported, volatility and a possible shrinking economy has the potential to make distressed securities attractive, as seen this week by Barclays’ announcement of new appointments to its distressed credit team.

Amid the uncertainty, PDI Research & Analytics has looked at foreign investment in UK-focused private debt capital.

Since 2010, more than $15 billion has been raised by closed-ended private debt funds focusing on the UK. Of this, just 2.8 percent was raised by funds managed by EU-based GPs, namely in Spain and Luxembourg.

When it comes to funds focused solely on Britain, UK-based fund managers have the upper hand, with GPs including ICG-Longbow and AgFe raising 73 percent of UK-focused capital.

The United States is also a key player in this space, having raised $2.1 billion via UK-only private debt vehicles since 2010. However, this compares with $16.4 billion raised for Western European investments. If sterling reaches parity with the US dollar by year-end, as some predict, it will be interesting to see whether US investors invest more in the UK.