So far this month just $467m has been raised in flotations in the UK, according to Dealogic, compared with $2.1bn in Europe and $2.8bn in the US.
This environment has squashed revenues for the investment bankers who work on flotations, with buyers also cautious as they do not want to invest in a company only for its value to fall because of a political event.
“The European Referendum is impacting UK volumes – in the year to date we’ve seen the lowest volume of UK deals in several years. People are on the fence and investment committees today are reluctant to approve a deal for a UK business, because nobody knows what is going to happen,” said UBS’s Simona Maellare.
She expects the malaise to end abruptly if the UK votes to remain in the EU, but it could spread further afield if Brexit does occur following the referendum on 23 June.
“It has been more a UK phenomenon, though depending on the impact it might affect the continent as well. If there was a Brexit markets will be in turmoil, in the volatility it will be harder to get transactions done, the debt and equity markets will be impacted. So I think for now it is a UK phenomenon but it could easily become a European-wide phenomenon depending on the outcome,” she said.
“[If the UK votes to stay in] there will be an acceleration, we know of some assets which have been parked and will likely be put to the market after that point.”