The UK's financial watchdog has told private market firms to bring their handling of conflicts of interest up to speed with the rapid growth of the sector, after a review found standards varied considerably from firm to firm. The Financial Conduct Authority (FCA) published its findings on 23 October 2026, following a multi-firm review covering private equity, private credit and real estate.

What the review found

The review looked at how firms identify, manage, mitigate and disclose conflicts of interest. It found examples of good practice, including strong governance, effective oversight and independent challenge. But it also found recurring weaknesses in areas such as cross-fund transfers and multi-party transactions, gifts and entertainment, and information barriers between teams.

What firms must do now

The FCA said more complex business models carry more numerous and complex conflicts, and therefore need stronger controls. Firms with simpler structures faced fewer risks, but the regulator stressed that no firm can rely on informal processes or individual judgement alone to spot a conflict in time.

Firms are expected to be able to identify, record, manage and disclose conflicts effectively, and to demonstrate that investors are being treated fairly. That matters most where investors place heavy reliance on a firm's judgement, governance and controls, rather than on a public market price. Michelle Beck, the FCA's director of wholesale buy-side, said firms should act on the findings and identify where they can strengthen controls, adding that the regulator wants to encourage confidence in the UK's private markets. The FCA also said it is separately examining governance and conflicts concerns around the use of private credit to fund consumer litigation claims.

Sources: FCA, Securities.io.