Goldman Sachs Asset Management warns UK not to leave the EU

The chief executive of Goldman Sachs’ European investment business has warned that a potential UK exit or “Brexit” from the EU would seriously damage the British economy.

Andrew Wilson, who has managed the European business of Goldman Sachs Asset Management, the $1tn investment manager, since 2006, said: “The economic argument for [Britain] staying in the EU is pretty compelling.”

He said the UK would be very unlikely to vote to leave the EU in a referendum expected by 2017. Wilson’s comments contrast with the views of several senior hedge fund managers.

Last week it emerged that Michael Hintze, founder of CQS, the hedge fund, and a big donor to the Conservative party, is considering a significant donation to one of the two “out” campaigns promoting a British exit from the EU.

Crispin Odey, the founder of Odey Asset Management, has already publicly announced his wish for the UK to leave the EU, while Helena Morrissey, one of the most prominent women in the asset management industry, said last month that the dangers of Britain leaving the EU have been exaggerated.

Ms Morrissey, a member of Business for Britain, a Euro-sceptic group, and chief executive of Newton, a BNY Mellon subsidiary, added that the EU was turning out to be a “flawed concept” because it had monetary union without fiscal or political union.

Damage

However, Wilson said: “Should a Brexit happen, how [would] the UK interact with Europe?”

Michael Clarke, director of the Royal United Services Institute, a defence and security think tank, also warned last week that a Brexit could lead to a break-up of the UK and damage the Conservative party’s reputation for a decade.

Speaking at a conference organised by Sarasin, the UK asset manager, he said: “[A British exit from the EU] would be chaos. David Cameron would be known as the worst prime minister ever.”

The vast majority of institutional investors have raised concerns about a British exit from the EU. Three-quarters of the 120 institutional investors polled by NN Investment Partners, the Dutch fund house, said the impact of a Brexit on financial markets would be negative.

Nearly a fifth of investors said a Brexit would be “extremely” negative for Europe’s financial markets.