Guy Hands: Brexit threatens peace, damages UK

Guy Hands

Veteran private equity boss Guy Hands of Terra Firma Capital Partners Limited has warned that Brexit has not only damaged the UK’s financial services industries — but has shattered the peace of Europe.

In an opinion column to be published later this week in Private Equity News, Hands writes: “The UK’s position as Europe’s leading financial services hub is at risk and the balance of peace and democracy in Europe has been shattered.

“My view is that Brexit is largely to blame for both.”

Hands writes that he predicted as far back as 2014 that if the UK left the EU “there would be a war” in Europe by 2025.

“Regrettably, the tragic events in Ukraine have been unfolding for a year now,” writes Hands.

“Hopefully my prediction of a nuclear war by 2030 will not come to pass but it must have at least a 20% probability.”

In the article, Hands admits he made a “big mistake” leaving the UK for Guernsey in 2009 but said he felt he had little option after being “aggressively targeted” by the UK tax authorities alongside an un-named hedge fund.

“On principle, I felt that I could not remain in the UK while the Inland Revenue was taking what my advisors and I felt was an absurd position in relation to the UK private equity and hedge fund industry,” he writes.

“The hedge fund that was targeted clearly felt the same as it also moved offshore.

“The Inland Revenue ultimately dropped its position two years later so either the absurdity of its approach must have become obvious to them or it must have realised that it risked losing the entire industry.”

On the impact of Brexit on London’s financial district, Hands writes that the UK’s departure from the world’s largest trading block “threatens the advantages that the UK has historically offered” with the UK’s eco-system of financial, legal and business professionals taking a major hit.

“I worry that with Brexit, ambitious individuals and employers will turn to other European cities such as Paris or Amsterdam, which offer free movement and uncomplicated access to the European open market,” he writes.

Hands adds that Brexit contributed to London losing its position as the largest European stock market to Paris at the end of last year.

“It is now better to have a European holding company rather than a UK one, and I believe it will soon be essential,” he writes.

“I, like many UK hedge funds and private equity funds, am considering where in Europe one should base oneself, which I find an extremely sad but an inevitable result of Brexit.”