Wealth manager exits all property investments following Brexit result
WEALTH and investment management firm Equilibrium Asset Management has sold all of its commercial property investments following the Brexit vote.
The firm, which held around £130m across commercial property funds in 2015, made some precautionary switches ahead of the vote, equating to around 7% of portfolios, in March and April this year.
It sold a further 3% just before the vote and on the day of the result it sold all remaining holdings in anticipation of a weakening of commercial property prices.
Colin Lawson, founder and partner of Equilibrium said: “As an asset class, property last year formed around 22% of our strategic, long-term balanced portfolio. But the world is changing so fast that if you snooze, you really do lose.
“In order to prepare for the referendum outcome, we foresaw the need to mitigate risks, limit exposure and free up funds to seize upon any arising investment opportunities in order to keep outperforming the market.
“Risks such as sterling weakness deterring overseas buyers, a possible drop in demand for City offices and a reduced appetite for speculative properties if London’s position in the EU is diminished due to economic volatility – all drove our decision to exit.”
The firm exited before trading was suspended across several large property funds amid a rush to extract funds out of UK property.
Lawson added: “We are delighted we acted so quickly to get our clients’ money out of the funds – and if we hadn’t the money would be locked in many or face huge penalties to get out.”
Instead, Equilibrium has raised its investment in bond funds, in particular in index-linked bonds, which it says will perform well if sterling weakness persists, driving up the costs of imported goods and thereby pushing up inflation.
