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Investors rally behind UK SMEs following Brexit with London leading the way
Posted by Billy Wood on 29 Jul 2016
New research conducted by IW Capital and Crowdfinders has shown that investor confidence in UK SMEs has defied the Brexit gloom currently undermining UK shares, bonds and property.
The survey, carried out in response to the Lloyds Bank Investor Sentiment Index which charted a decline in investor confidence across the board, probed 1,000 investors to measure their confidence in UK SMEs as an investment vehicle.
Of those questioned, 52% of British investors have pledged to support the SME community through private investment channels, which the private equity house claims would equate to 12.9m investors UK-wide.
London in particular saw a high number of investors pledging their support to the SME community, with 68% of respondents from the capital saying that they were still keen to provide investment, the highest proportion out of any region in the UK.
Most tellingly, and perhaps most hearteningly for the long-term prospects of the SME sector, 18-34 year olds were the age group to show the most confidence in the sector as an investment opportunity with 70% of them saying they would invest in UK SMEs in the current climate.
Echoing the uncertainty, the figures were split when it came to investor confidence in other areas of the economy, with 55% saying they were not confident in the long-term prospects of the FTSE following Brexit while 52% pronounced similar misgivings about the property market.
Commenting on the findings, IW Capital’s Chief Executive Officer, Luke Davis, touched upon the fact that Britain has been ‘in a state of limbo’ since Brexit and that consumers and investors were understandably reticent about the current economic landscape.
However, he believed SMEs could take heart from the survey’s findings and said: "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."