Old Mutual Global Investors chief executive Richard Buxton has expressed his sadness at the outcome of the EU 'leave' vote and said investors should now "brace themselves for an unpleasant period of relatively indiscriminate selling".
Buxton (pictured), manager of the £2.2bn Old Mutual UK Alpha fund, had previously been vocal in his belief the UK would remain in the EU.
Speaking today, he described the decision as the 'worst of the two possible outcomes' and that he had expected the status quo to prevail.
As a result of the vote, he said he expected the UK would quickly enter an economic recession which could lead to a cut in interest rates.
"The biggest sadness of today is that it is reasonable to assume that the UK will quickly enter a period of economic recession, the key reason why we believed the outcome would be different from what has materialised today. It is, in effect, likely to be the first ever 'DIY recession', as George Osborne prophetically called it.
"It is difficult to say at this stage what action the Bank of England may take, but it is not impossible to imagine that it may quickly cut interest rates. Restarting the programme of quantitative easing – a feature that has been absent from the economic landscape for some three years now – also looks a possibility."
He also said the impact of the 'leave' vote would not be contained in the UK and Europe and could potentially tip the US into a recession.
The UK equities manager said domestically-focused equities would have the bleakest prospects, while those which depend on overseas earnings would have relatively better performance.
"We believe that the prospects for domestically focused UK businesses are clearly the bleakest of all. FTSE multinationals will, on a relative basis, almost certainly perform better than their domestically oriented peers as the weaker pound will support overseas earnings when translated back into sterling.
"Nevertheless, investors should now brace themselves for an unpleasant period of relatively indiscriminate selling as funds aim to meet redemptions in conditions where liquidity may be more limited than usual."