Champagne was flowing in London’s Mayfair as the news hit.
Boris Johnson’s Conservatives weren’t just winning, they were trouncing Jeremy Corbyn’s Labour across the UK, including working-class Northern towns far removed from the West End.
Michael Spencer, founder of interdealer broker Icap and longtime Tory donor, threw a celebration at Scott’s, the upscale seafood restaurant in London, according to a person familiar with the matter. About 200 guests toasted Johnson’s triumph.
The result was a “crushing national repudiation of the dangerous and divisive neo-Marxist policies” embraced by Labour’s leadership, Mr Spencer said in a statement.
Mr Corbyn made attacks on the ultra-wealthy a key part of his campaign, as well as pushing for nationalisation of utilities, higher taxes and another referendum on a deal to leave the European Union.
Other rich Brits celebrated his defeat in quieter ways and started looking ahead to the next stage of Brexit, which the size of Johnson’s victory almost certainly ensures.
Peter Hargreaves, one of the biggest supporters of Britain’s decision to leave the European Union, said he was relieved by the Conservative Party’s victory. He blamed Labour’s disappointing showing on Mr Corbyn’s lack of appeal even in the northern heartlands.
“I was in contact with lots of friends in the North and they were quite surprised how many Labour voters weren’t going to vote for Corbyn. They were petrified of Corbyn.”
The Lancashire-born billionaire had another reason to celebrate. He owns about a third of online investment platform Hargreaves Lansdown Plc, whose shares rose 4.1 per cent as of 12:40 p.m. in London, boosting the value of his stake to $4.1 billion and his overall fortune to $4.6 billion.
His wealthy peers also had a bumper day. In total, the 16 Brits on the Bloomberg Billionaires Index - including Jim Ratcliffe and James Dyson - added around $2.8 billion to their combined net worth on Friday.
Relief was a common theme.
“I don’t need to celebrate - I’m just very, very happy with the result,” said John Caudwell, who founded Phones 4U, the mobile-phone retailer. “If Labour had got a majority or there was a hung parliament, which wasn’t impossible, I would have been devastated. Far from celebrating, I would probably have been in a corner somewhere sobbing.”
That sentiment echoed across the City of London after months of fearing a Corbyn victory would do even more damage to the British economy than a hard Brexit with no transition deal.
“Business in general will really appreciate the clarity,” said Jeremy Isaacs, financier and founding partner of private equity firm JRJ Group. “Markets should react positively that the Corbyn risk is gone and we should see foreign direct investment flowing into the country.”
While Hargreaves had said he would stay in the UK no matter the result, many wealthy families based in Britain had made plans to relocate to more tax-friendly regimes such as Monaco or Switzerland if Mr Corbyn came to power. Now those plans are instantly gone, says John Elder, a founding partner of Family Office Advisors LLP, a firm based in London that provides strategic advice to wealthy families. Instead, he expects family offices will look for bargains in myriad asset classes in the UK, from property to stakes in companies.
“There is political stability and clarity,” Elder said. “The UK is now an undervalued country to invest in for at least the next five years.”
The London property market in particular could see a boost, according to Liam Bailey, global head of research at Knight Frank.
“It will release a lot of pent up demand in the market,” he said. “One group that may want to move on with things quite quickly are overseas buyers. With the pound rising they’ll experience an erosion of their buying power, which may well encourage transactions,” although he cautioned that Brexit would still hover above the market.
It isn’t just foreign capital that might flow back into the British property market. Mark Stephen, the founder and managing director of Reditum Capital, a London-based real estate investment firm, said a major domestic pension fund is poised to place 50 million pounds to £100 million ($134 million) to work in his fund now that Mr Johnson and the Tories have won control of Parliament.
Reditum plans to invest the fund in land earmarked for new housing developments north of London and in Newcastle. “They premised the investment on the result going the way it did, so hopefully we can wrap that up in the next year,” Stephen said.
Others money managers were more circumspect.
Ever since the Brexit referendum was passed in June 2016, Seven Investment Management LLP, an investment firm in London with 13 billion pounds in assets, had been weaning its portfolios of U.K. stocks and looking abroad to fill the gap. Now its portfolio managers will take a serious look at ramping up British equities, said Ben Kumar, an investment strategist with the firm.
But he’s telling clients he remains cautious because after Brexit no one knows whether Mr Johnson will succeed in negotiating new free trade agreements with Brussels by December, and another with Washington.
“The problem with Boris is that he doesn’t care what he’s promised before, deadlines just go flying by, so will he get it done by December?” Mr Kumar said. “The point is, uncertainty hasn’t gone away.”
Hargreaves is also focusing on how the next stage of Brexit negotiations proceed now that Johnson has the biggest Tory majority since 1987, when Margaret Thatcher was prime minister.
“It’s like a game of poker,” he said. “You have a hand that you’ve got to play well.”
Still, the prevailing expectation was that the new government’s mandate would restore some zip to an economy that’s largely been in a holding pattern since the UK voted to leave the EU in 2016.
Mobile-phone billionaire Mr Caudwell said now is the moment to make some big bets on the economy as a whole.
“There has definitely been a reluctance on my part to press buttons to further investments,” he said. “Now I can go full steam ahead.”