North America’s reputation as a global trendsetter has led many financial commentators over the past few years to predict the imminent arrival of a wave of Gordon Gekko-like corporate raiders on British shores. By stealthily buying up small stakes in companies, and amassing countless institutional allies in the process, hedge fund managers have made a lucrative habit out of imposing corporate change. Yet fast forward to 2016, and there’s still only a handful of activist investors attempting to replicate the type of brutal campaigns perfected by US gurus Bill Ackman, Carl Icahn or Dan Loeb in the UK.
That could all change now that Britain has voted to leave the EU. Leading this argument is the depreciation of the pound against other major currencies – shareholders in iPhone chip designer Arm (ARM) were among the first beneficiaries of prized British assets becoming much cheaper to foreign investors. Should the Bank of England’s warning of economic instability ring true, expect new chancellor Philip Hammond to cut corporation tax in a desperate attempt to protect several UK companies from a tide of uncertainty. While such an environment won’t likely appeal to domestically-focused equity investors, bargain-hunting activists will be thrilled.