Hedge-fund managers are sensing opportunity. After enduring the worst first-quarter returns since the start of the financial crisis, the prospect of Britain voting to leave the European Union is creating the market turmoil that can make them money.

As shock waves reverberate through the region in coming weeks and months, measures of volatility could double and currency swings mirror market turmoil last seen when Lehman Brothers Holdings Inc. collapsed in 2008, according to Stephen Isaacs at Alvine Capital Management Ltd. in London. A vote to leave will “exponentially” increase the likelihood of the EU breaking apart, triggering opportunities as assets are repriced across the region, said Luke Ellis, president of Man Group Plc.

“The impact will be well beyond what everybody is talking about,” said Ellis, whose firm oversees $78.6 billion as the world’s largest publicly traded hedge-fund manager. “If we do get a vote for Brexit, it’s the second and third-order effects which are much more interesting from an investment point of view.”

First, though, there is the vote. And with many hedge funds nursing wounds from the worst start to a year since 2008, some managers are taking money off the table as they fear bets could go terribly wrong. When Switzerland scrapped its cap on the franc in January 2015, the $830 million Everest Capital Global fund was wiped out, and Comac Capital, which managed $1.2 billion, had to return money to clients.

The $2.9 trillion hedge fund industry is under fire from institutions and investors as many funds have failed to protect clients from volatility. More funds shut than started in the first three months of the year, the second consecutive quarter that closings exceeded openings, according to data published by Hedge Fund Research Inc.

The Chicago Board Options Exchange Volatility Index has climbed about 21 percent this month. The pound fell to a more than two-month low against the dollar last week after opinion polls put the “Leave” campaign ahead. It recovered more than 2 percent yesterday after a weekend poll put “Remain” in the lead. Axa SA Chief Executive Officer Henri de Castries said last week that there’s an “extremely high” probability the U.K. will vote to leave the EU.

Speculators “will be eager to exploit any miscalculations by the British government or British voters," George Soros, the billionaire investor known for his hedge fund’s successful bet against the pound in 1992, wrote in The Guardian newspaper. “A vote for Brexit would make some people very rich – but most voters considerably poorer."

Market ‘Complacent’

“The market has been very complacent about Brexit,” said Deepak Gulati, founder of Argentiere Capital AG, which manages about $2.5 billion. "We definitely think this would be a big event which could have further ramifications and may lead to the European Union imploding sooner rather than later.”

Gulati, whose fund bets on volatility and is positioned to profit if the U.K. votes to leave the EU, said last week the options market is pricing a 5 percent one-day move in the pound. He expects to profit because euro traders and equity markets from Europe to Japan are not anticipating price swings on the same scale.