Despite mass uncertainty surrounding financial markets and a variety of investment products in the wake of Brexit, the majority of British investors are resoundingly confident in the country’s SMEs as an investment vehicle.
This is according to independent research of 1,000 UK investors – commissioned by private equity house IW Capital and crowdfunding specialist Crowdfinders. The research found that over half (52%) of the investors surveyed said they would support the UK’s small and medium-sized enterprises through private investment channels in the aftermath of Britain’s decision to leave the EU – equating to 12.9 million investors across the country.
When viewed in comparison to post Brexit sentiment towards alternative asset classes, the statistics are drastically lower; according to Lloyds Bank, investor sentiment towards property dropped by 35.36 percentage points between June and July 2016, while sentiment in relation to UK shares (-21.75%) and government bonds (-15.58%) also fell sharply in this period. The index demonstrates the impact of the post-Brexit economic climate on investor confidence levels across the UK, with many investment markets adversely affected in the weeks following the EU referendum. In mid-July 2016, the Index fell to its lowest level since it was launched in March 2013, with property, government bonds and corporate bonds all experiencing notable declines in investor sentiment.
Crowdfinders co-founder and CEO of IW Capital Luke Davis commented on the report’s findings: “Following Brexit, Britain has been in a state of limbo, with consumers and investors unsure how the economic landscape will change over the coming months and years.
“Our research supports this and shows that there is still a great deal of uncertainty surrounding what the result of the EU referendum will mean for the long-term prospects of the FTSE, the property market and the value of the pound. However, what we can take from this research is that there is a silver lining from a business perspective as our nation’s investors are willing to support SMEs in the wake of Brexit, something that cannot be said for other investment classes.”
