U.K. real estate and European financials will likely bear the brunt of the Brexit fallout, Brian Singer, head of William Blair’s Dynamic Allocation Strategies team, recently told Citywire. Singer believes these asset classes may suffer as a result of a decrease in immigration, the unwillingness of banks to provide liquidity, and an uncertain regulatory environment.
He notes that it’s prudent to let the dust settle given the level of uncertainty.
“The key to analyzing something as complex as Brexit is to take a step back and try not to anticipate every little thing, but think about what the incentives are,” Singer said in the interview.
Singer believes that the European Union (EU) and the U.K. have incentives to keep goods, services, and capital moving freely across EU markets. While labor is currently in question, neither the EU nor the U.K. has a great incentive to stop that labor from a business perspective.
As a result, Singer said he anticipates that after taking this step back that going forward “we’ll be re-risking our portfolios once all of this settles down.”