Old Mutual Asset Management (OMAM) warns that pension funds and institutional investors could see the risk exposures of their portfolios shift significantly if Britain votes to leave the EU, particularly those with higher exposures to the most EU-concentrated sectors; telecoms (37.3%), IT (22.4%) and, consumer discretionary (21.9%). The report says a vote for Brexit would also have an impact on UK financial markets as it will make it more difficult for banks to raise capital from international markets. The asset manager found that around 17% of the revenue of UK-listed firms in 2015 were derived from the EU (equivalent to £350bn) while 32% came from the UK itself, and suggested that staying in the EU would benefit larger companies most given their greater exposure to EU markets.
Old Mutual Asset Management (OMAM) warns that pension funds and institutional investors could see the risk exposures of their portfolios shift significantly if Britain votes to leave the EU, particularly those with higher exposures to the most EU-concentrated sectors; telecoms (37.3%), IT (22.4%) and, consumer discretionary (21.9%). OMAM highlights the component of large firms with significant EU and/or 'rest of the world' earnings in UK equity, tracker, and income funds, hence, asset managers need to assess how companies' future revenues could impact portfolio risk profiles, and consider the volatility that could occur should some of those companies choose to exit the UK in the event of a Brexit. The asset manager found that around 17% of the revenue of UK-listed firms in 2015 were derived from the EU (equivalent to £350bn) while 32% came from the UK itself, and suggested that staying in the EU would benefit larger companies most given their greater exposure to EU markets.