Private market conflict controls fail to keep pace with growth
Private market firms show uneven standards in managing conflicts of interest, the Financial Conduct Authority (FCA) said on October 23, 2026. Its review found gaps in identifying conflicts and updating controls as firms grow.
Growth outpaces conflict controls
The FCA reviewed conflicts management across private equity, private credit and real estate.
Some firms failed to identify conflicts adequately or update controls as their size and business complexity increased.
Recurring weaknesses involved cross-fund transfers, multi-party transactions, gifts and entertainment and information barriers.
Good practice included strong governance, effective oversight and independent challenge.
Firms must identify, record, manage and disclose conflicts effectively and demonstrate fair investor treatment.
Michelle Beck, the FCA's director of wholesale buy-side, said: “Firms need to ensure their management of conflicts of interest keeps pace with growth in their size and complexity.”
Private credit under separate scrutiny
Private markets cover assets, companies and debt not listed or traded on public exchanges.
The UK is a leading international center for these investments, which provide business capital and investor returns.
Their conflicts can differ from those in public markets, making disclosure important for investors.
Separately from this review, the FCA is examining governance and conflicts concerns around private credit funding consumer litigation claims, including risks of harm to investors, consumers and markets.
Controls must match complexity
The FCA wants firms to act on the findings and strengthen controls where needed.
Its focus includes areas where investors rely heavily on firms' judgment and governance.
The review forms part of wider supervision of private markets and investor outcomes.