FCA calls on private market firms to manage conflicts of interest in line with rapid growth
By FCA
AI summary of the source article
An FCA review found that private market firms vary in how they manage conflicts of interest as the sector grows. The regulator urged firms to strengthen controls after identifying weaknesses in cross-fund transfers, multi-party transactions, and information barriers.
Why it matters
The FCA stated that "effective disclosure is important to enable investors to assess whether their interests are being protected" and aims to "encourage confidence in the UK’s private markets."
Key facts
- An FCA review found varying standards across private equity, private credit, and real estate firms in managing conflicts of interest.
- Recurring weaknesses were identified in cross-fund transfers, multi-party transactions, gifts and entertainment, and information barriers.
- The FCA is separately examining governance and conflicts concerns regarding the use of private credit to fund consumer litigation claims.
Source excerpt · FCA
Private market firms vary in how well they identify and manage conflicts of interest, according to an FCA review. Private markets refer to investments in assets, companies, or debt not listed or traded on public exchanges. They’ve grown significantly in recent years, and the UK is a leading international centre. Private markets play an increasingly important role in providing capital to businesses…