Hedge funds will gain both ways: those that had bet on Brexit had reaped the benefits of betting against UK assets, are now re-positioning for these assets to get stronger.
In a significant development, two of the biggest donors to the Brexit campaign now believe, Brexit, the project that they have championed, will eventually be abandoned by the government and that the United Kingdom will continue to stay in the European Union.
According to Peter Hargreaves, who was the second biggest donor to Britain’s historic Brexit referendum, and Crispin Odey, a veteran hedge fund manager, Britain is likely to stay in the EU despite their campaign victory in the 2016.
As a result of this reassessment, Odey, who runs his hedge fund Odey Asset Management, is now re-positioning for the pound to strengthen. His flagship fund had previously reaped the benefit of betting against UK assets midst wider market fears about the impact of Brexit.
The change of heart come midst a deadlock among lawmakers in the British parliament over the deal hammered out by British Prime Minister Theresa May.
“I have totally given up. I am totally in despair, I don’t think Brexit will happen at all,” said Hargreaves, 72, who is one of Britain’s wealthiest men. He has donated $4.08 million (3.2 million pounds) to the leave campaign.
He went on to add, “They (pro-Europeans) are banking on the fact that people are so fed up with it that will just say ‘sod it we will stay’. I do see that attitude. The problem is when something doesn’t happen for so long you feel less angry about it.”