* Says risk of "hard Brexit" has increased
* Says likes euro, but has French election protection
(Updates with quotes, context)
By Dhara Ranasinghe
LONDON, March 29 BlackRock's head of global
bonds said on Wednesday he remains invested in the British pound
but has concerns over whether Brexit negotiations can be
completed within their two year deadline.
British Prime Minister Theresa May will file formal Brexit
divorce papers on Wednesday, starting a countdown to a divorce
with the European Union in 2019.
"My main concern is around the timeline for trying to get
these things done as quickly as we can," said Scott Thiel of
BlackRock, the world's largest asset management firm.
"We are still positive on sterling but there are
still...risks," he said, adding that the possibility of a "hard"
Brexit if there is no agreement had increased.
Investors' main fear is that a "hard" Brexit -- one in which
Britain would lose preferential access with its largest trading
partner -- would hurt the British economy.
The better-than-anticipated performance of the economy
following last year's referendum on EU membership has been a
reason to be positive on sterling, Thiel said.
Britain's pound hit a two-month high of $1.2615 on
Monday in a move driven chiefly by broader weakness of the
But uncertainty surrounding the terms of Brexit continues to
weigh on the currency, which is down almost 20 percent against
the dollar since the Brexit vote.
Thiel, who manages funds totalling about $41 billion assets
under management, also said he likes the euro as an investment.
He added, however, that he had bought so-called put options
on the single currency to protect against any market ructions
stemming from the upcoming French presidential election.
A put option allows an investor the right but not the
obligation to sell an asset at a later date and is often used as
a hedge against risk.
French presidential elections in April and May are viewed as
a key event risk for financial markets as one of the leading
contenders is the far-right, eurosceptic candidate, Marine Le
Pen, who wants France to ditch the euro.
"I like the euro generally but we have to recognise ... what
we can't possibly know, and we can't possibly know the outcome
of the French elections," Thiel said.
"Therefore I like to have downside option protection on the
euro because if the French political situation were to go for
the FN (Front National) then the euro would go significantly
(Editing by Gareth Jones)