Liquid alts and private debt likely to benefit most from Brexit – bfinance
Investment consultant bfinance has provided some insights on asset classes that could emerge as winners following Brexit.
The firm says the list of asset classes benefitting through the Brexit is long with gold and govies being seen as safe havens.
Also, it stresses that the US equity market also benefitted “to a certain extent” from a flight to quality from equity investors.
Overall, Brexit will probably have “a relatively mild impact on global equities and bonds, but to have a more direct impact on those asset classes within the UK,” the consultant estimates.
bfinance highlights that liquid alternatives and private debt are two asset classes which are likely to perform well in a Brexit landscape.
“Liquid alternatives will benefit from the increased dispersion associated with the greater uncertainty at both stock and sector level.
“Private debt, which includes corporate, real estate and infrastructure debt, is set to benefit from the relatively high yield, the reduced competition from banks and the resilience to a downturn in values and cashflows,” bfinance argues.
It specifies that this is particularly the case for more senior debt and less so for higher yield or mezzanine debt that has less of a cushion to protect loans from value declines.
To read the full research : One-month-on-the-investment-implications-of-Brexit