Comment: Brexit chaos sends fund managers Miton and Premier into each other's arms

The chaos over Brexit presents a dilemma for foreign companies looking to buy British rivals.

On the one hand, you get the benefit of the pound at a ridiculous $1.21. But on the flipside, Britain could be set for a long recession if our EU departure goes bad.

So, while some sectors are seeing big overseas M&A action — Cobham in defence, Entertainment One in media, Merlin and Greene King in leisure — others, less so.

Take Britain’s smaller fund managers; they’ve been hoping for foreign suitors for a year or more, largely to no avail. Faced by ever-increasing regulatory burdens (thanks, Mifid II), their share prices have been under pressure, leaving them struggling to invest and grow.

Foreign buyers have had a sniff at most, but stayed away in fear that the great British public could lose all appetite for investing in their funds if Brexit goes bad. The risks outweigh the cheapo price.

So, these too-small British managers are buying each other instead. Liontrust bought Neptune a few weeks back and today sees Miton and Premier get together.

The moves make sense: Miton is a stockpicking expert led by active fund managers, while Premier largely invests in other managers’ funds. That means the firms can be integrated without risking an exodus of star managers upset at being forced to work with their erstwhile rivals. Also, Miton sells through wealth managers, Premier through IFAs; more scope for cross-selling.

Cost savings of £7 million will be almost as big as Miton’s entire annual profit. You can see the appeal.

Liontrust, River & Mercantile, Polar Capital, Impax and the rest will be eyeing each other up like teens at a disco. Expect more couplings soon.