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RSM survey reveals concerns by private equity specialists over Brexit vote

A survey carried out by RSM amongst private equity specialists has revealed that two thirds are planning to vote to remain in the EU when British voters take to the polling booths on 23 June, with only a fifth saying they would be voting to leave.

The survey, carried out among around 100 industry professionals within the private equity sector, found that three-quarters (74 per cent) of the respondents said they believed that leaving the EU could result in conditions for private equity deals declining for up to two years, with nearly a quarter (23 per cent) saying this could last for longer than five years.

Nearly half of those that took part in the survey (47 per cent) said that free trade agreements with EU countries were most likely to influence the way they voted, with nearly 15 per cent saying red tape and regulatory issues would be the deciding factor.

Charlie Jolly, RSM’s head of private equity coverage, says: ‘I think there is real concern amongst the private equity community that if the UK does leave the EU, then immediately afterwards we could see deal processes taking much longer, as well as an increase in the cost of transactions. This could result in a lower number of completed deals taking place, as well as increase the amount of pressure on private equity funds to deploy capital – certainly for the short-term.

‘Whether this is having an influence on transactions ahead of the Brexit vote is difficult to say, but the uncertainty alone will almost certainly be playing on the minds of private equity professionals and may very well be impacting their decisions over the next few weeks.’

Adam Spencer, associate director in RSM’s M&A and private equity team, says: ‘The EU referendum debate is clearly high on the agenda of PE at this time. If management teams or vendors are commencing a PE fundraising process ahead of the referendum we would urge them to carry out thorough and detailed contingency planning, considering the impact to their businesses in the event of a ‘Leave’ result.'

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