I was as surprised and disappointed as most Londoners after we voted to leave Europe last Thursday but I have been shocked by the depth of everyone’s misery since.
Here’s what I think:
- We are in for a prolonged period of increased uncertainty
- There are plenty of hotheads but key figures like Angela Merkel and Teresa May want a sensible compromise that keeps Britain trading with Europe
- Therefore, the likelihood is that at the end of the day we will still have free movement of labour and access to European markets for most goods and services – i.e. not much will change
The big concern for me is how much damage comes in the short term as a result of the uncertainty, a concern that’s heightened by the almost embarrassing collapse of leadership at the top of our two main political parties. The current run on property funds is a great example of fear induced value destruction. Within our portfolio there hasn’t been much fallout, but we are hearing the odd story of people sitting on their hands and not doing deals. Similarly I was with an Israeli investor today who is revisiting his plans to open a London office.
Paradoxically it seems to me that its elements of the Remain camp that are now causing the biggest problem. Their anger and fear is increasing the uncertainty we’re suffering from which is causing more redemptions, which is, in turn, increasing the anger and fear, and I could make a similar argument about sterling’s depreciation.
So I wish everyone would quit with the handwringing and get on with life, and especially with business. In the case of Forward Partners nothing has changed. I’m a little concerned that with heightened perceived risk there might be less appetite for investing in venture capital funds, and we will work a bit harder on the fundraising side of our business as a result, but other than that it’s business as usual.
For me the most worrying thing about this whole affair is how clear it now is that huge swathes of the country feel totally abandoned by our political system. It’s been hard to see that from within London, but the picture is now very clear. It’s imperative that we fix our fractured society. Otherwise we will get more protest parties and crazy votes like the one we’ve just had. Like it or not immigration is a huge part of the issue, and whilst I am totally sold on the economic benefits of bringing people into our country, it’s clear that those arguments hold little sway with most voters. These are difficult problems which will take strong leadership to fix, and at the moment it’s hard to see where that comes from.
In fact, it’s an absence of leadership that landed us in this mess in the first place.