US billionaire David Rubenstein has said a second referendum on whether the UK should leave the EU is “the only solution” that could break Britain’s stalemate over Brexit.
Speaking at a private equity conference in Berlin, Mr Rubenstein, who co-founded US buyout fund Carlyle in the 1980s, added that Brexit was hurting UK growth but that considerable “political will” would be needed for the country to hold a new EU referendum.
“It’s difficult for an American to come to Europe and tell Europeans how to run their country because we haven’t run ours perfectly. So it’s hard for me to give advice to people in England.” Mr Rubenstein said.
“But I do think that the only solution that I can see that would make sense to resolve this problem is a revote. The first vote was — you could say — not relatively informed because it wasn’t clear what Brexit really meant. Now it is clear.”
His comments followed warnings last year that Carlyle, which is one of the largest private equity firms in the world, was cutting back on investments in the UK.
More generally, private equity groups’ hunger for deals in Britain has nearly halved since the vote to leave the EU two years ago, according to data provider Dealogic.
At present, prime minister Theresa May is caught between the EU’s refusal to renegotiate the exit deal she agreed with Brussels and many of her own MPs’ rejection of one of the deal’s chief features — the so-called backstop to prevent a hard border in Ireland. When the House of Commons voted on the issue last month, the agreement was rejected by a record margin of 230 votes.
In a sign of the confusion wrought by the continuing political drama, Mrs May announced this week three possible parliamentary votes, to be held no later than March 12-14 on, in sequence, a revised deal, a no-deal exit, and a delay to the scheduled Brexit date of March 29.
Meanwhile the possibility of a second referendum also moved up the British political agenda after Labour party leader Jeremy Corbyn said his party would back a new EU vote if its own plans for a softer Brexit failed. However, a majority of British MPs is thought to oppose another Brexit referendum.
Mr Rubinstein told a packed room in Berlin: “I don’t think anything will get resolved in the next couple of months. I think it is going to take a lot of political will by people to really ask for [a] revote.”
As a result both the British and EU economies and house prices in the UK would take a hit, he argued.
He said: “I think for the time being we are going to partially move forward in a really uncertain way. I think that’s really going to hurt UK growth and it will hurt UK property values and really hurt the European economy.”
During an interview with the FT last year, Mr Rubenstein said: “I think you’ve seen more and more investors pull back from investing in England than probably would have normally been the case . . . And there’s been uncertainty about how some English companies are going to handle [Brexit].”
“[Brexit] is a good example of a populist event that has given some concern to investors . . . I would not say that in the short term it has been a positive for the UK economy.”
Other private equity groups, such as Los Angeles based asset manager Ares, have focused more since the 2016 EU referendum on opportunities in other European cities, such as Amsterdam.
Some private equity investors have also demanded that buyout funds should not have exposure of more than 30 per cent to UK funds given the uncertainty.