AnaCap likely to ditch UK as a top tier investment destination

Experimental feature

Play audio for this article Pause

Experimental feature

Give us your feedback Thank you for your feedback.

What do you think?

I'll use it in the future

I don't think I'll use it

Please tell us why (optional)

Send Feedback

or

AnaCap Financial, the UK private equity firm that specialises in the financial services industry, has said it is likely to ditch the UK as a top tier investment destination.

The company, which is based in London and recently sold one of the UK's new "challenger" banks Aldermore to South Africa's FirstRand in a £1.1bn deal, blamed the falling value of the pound, pressure on consumer spending and European workers leaving the UK as factors that may put it off investing in the UK.

Speaking to the Financial Times Joe Giannamore, the company's founder and co-managing partner, said the "numbers are simply mindbogglingly obvious" when it comes to the business case for UK investing.

Mr Giannamore said: "It's terrifying. People are saying that it hasn't been that bad but we have a currency devaluation of 15 per cent to 20 per cent. You have a massive challenge to an economy."

He also cited inflation and the risk of tariffs on trade after Brexit as two of his biggest worries about the UK economy.

Mr Giannamore pointed to a rise in litigation over unpaid consumer debt as another sign of a worrying economic situation.

The value of borrowing on credit cards, overdrafts and car loans has reached £200bn for the first time in a decade.

It's terrifying. People are saying that it hasn't been that bad but we have a currency devaluation of 15 per cent to 20 per cent. You have a massive challenge to an economy

So far this year AnaCap, which has €3.5bn under management, has made no investments in the UK and instead has expanded its interests in France and Germany.

Last month Johannes Huth, the European boss of US firm KKR, said he was more cautious about doing deals in the UK because of Brexit and that the company was likely to invest more in France.

Some investors in new private equity funds have also been requesting funds invest no more than 30 per cent in the UK.

Separately, Mr Giannamore also said there had been limited interest in UK challenger banks from trade or private equity buyers because of worries about a potential recession.

He said: "We got lucky with FirstRand and I also think we were able to build a business that can withstand an economic cycle."

Source: AnaCap likely to ditch UK as a top tier investment destination