Pritchard: Private market confidence needs strong controls

UK private markets, now approaching £1.2 trillion in assets under management, are central to the nation's growth, with £58.7 billion raised last year and £25 billion invested in over 1,400 UK businesses.

This momentum is also evident in long-term asset funds (LTAFs), which grew from £5 billion to £7.5 billion in less than a year.

However, this rapid expansion brings increased scrutiny, especially amid global political uncertainty and market volatility.

The FCA is actively addressing these challenges through its work on robust valuation frameworks, which saw a report published in March 2025 setting out governance expectations.

Furthermore, a multi-firm review of conflicts of interest is underway, with findings expected later this year.

These initiatives aim to ensure investor confidence and market integrity, particularly after incidents like a major US private credit firm capping withdrawals due to a loss of trust, underscoring the critical need for transparency.

The FCA also supports the Bank of England's system-wide exploratory scenario (SWES) to assess private market resilience under stress.

Pritchard outlined three foundational pillars for confidence in private markets.

First, firms must maintain strong first-line controls, encompassing robust underwriting, operational resilience, and valuation discipline.

This is critical due to the long-term, illiquid nature of these markets, necessitating transparent product design.

Second, the FCA aims for sensible, proportionate regulation focused on material risks.

Following upcoming Treasury consultations on alternative investment fund manager rules, the FCA will propose a tiered regulatory approach, reducing obligations for smaller funds while ensuring robust oversight for larger institutions.

Third, a well-connected regulatory system is vital.

This involves close collaboration with domestic partners like the Bank of England, exemplified by the Private Market SWES, and international bodies such as IOSCO and the Financial Stability Board (FSB) to foster consistent, cross-border approaches.