15th December 2016
Taking the long view: US Elections and
the Brexit Referendum
by Joe Hime and Ben Kennedy
As the passing of Labour Day marks the final push for the US electoral campaigns, further reminders are pressed upon us over the similar situations the UK and the US find themselves in.
While the emergence of Donald Trump and Brexit dominate headlines and incite scepticism and worry, solace can be found in looking back at economic history. Economies rarely recover from crises at a pace the general public are happy with, the electorate demands change and seeks for an immediate reason for it being inhibited. Policy makers have been wary not to repeat the mistakes of the 1930s after the great depression, with protectionist policies suffocating trade around the world, but this hasn’t supressed public opinion.
While the European Union is not without its challenges, it’s a surge of UK protectionism which has led the British people to vote to leave the union. While analysing this event, similar conditions can be observed in the US. The rise in popularity of Trump is seen by some as a product of frustration, a vote for the anti-establishment, and potentially, a chance of more aggressive change in conservative policies. While the events in the UK and US are important, it is imperative to note they are part of a temporary swing, echoed in Europe and around the world. Sentiment, however, changes, but the foundations of our nations do not.
The UK possesses certain characteristics which has helped London to become the leading city for finance in Europe. These characteristics are what make the UK desirable not only to the global economy, but also to the remaining EU members. While other countries start to promote their cities as successors to London’s position, realistic contention is not thought likely. Levels of talent in London endured when the European Commission capped bonuses, so it remains doubtful that Brexit will cause more of a movement. Even in today’s world, the change of language and lexicon deters many. London still offers established financial and legal infrastructure, access to the highest quality advisors and the means to complete business in a familiar fashion.
While certain investment strategies thrive in changing conditions, stability outside of the investment spectrum cannot be underestimated. As the EU struggles with diverging political and economic positions, the UK offers stability in both politics and law. The recent retrospective taxation of Apple by the European Commission is the latest example of a business environment some may question when looking to develop a stable platform in Europe.
Despite the US going through a period of difficulty with domestic cohesion, the increasing strength we are observing in the US investment industry domestically and internationally can only be encouraged by an expansion to Europe. When exercising this Trans-Atlantic option, London is often the first step and Langham Hall is well positioned to help managers with many of the integral steps involved in the process of completing business in the US and Europe.
Langham Hall is strategically positioned to provide fund managers with the highest levels of support and quality of service. We are headquartered in London to give us access to the deepest pool of talent available in Europe and to be as close as possible to our clients. The integration of our US office now ensures US managers wishing to access Europe receive the highest quality service both at home and abroad. All work is completed in house and is not outsourced. We can help US managers set up in the UK and our Luxembourg and Channel Islands offices can support new and existing SPVs. Our depositary business is a market leader for RE and PE funds in the UK, both in terms of market share and efficiency. Our depositary business in Luxembourg means that we will remain in the EU no matter what the next few years bring.
If you would like to discuss how Langham Hall can support your business over the long term – please get in touch.
Head of UK Depositary
T. +44 20 3597 7969