FCA proposes changes to facilitate investment in patient capital

The Financial Conduct Authority (FCA) has today proposed changes to further enable retail investors to invest patient capital through unit-linked funds.

The authority is also exploring how UK authorised funds can be used to invest in patient capital.

The proposals follow the 2018 Budget, when Chancellor Philip Hammond announced a package of measures designed to increase investment in patient capital, a term for a broad range of alternative investment assets intended to deliver long-term returns, such as infrastructure, real estate, private equity, and venture capital.

The regulator has said that the proposed changes in the consultation paper are intended to enable retail investors to invest in a broader range of long-term assets through unit-linked funds, while continuing to maintain an appropriate level of protection.

Furthermore, the proposed measures aim to address potential barriers to investment by retail investors in patient capital, and will be beneficial to consumers by allowing funds to choose investment opportunities that match the needs of consumers more effectively.

FCA executive director of strategy and competition Christopher Woolard said: “We are proposing changes to allow retail investors greater access to long-term investment opportunities. We are also seeking views to help us identify any unnecessary barriers to investment in patient capital through authorised funds. We will ensure that any changes continue to provide an appropriate level of protection for consumers.”

Alongside the consultation, the regulator has also published a discussion paper that explores how UK authorised funds can be used to invest in patient capital, setting out the relevant authorised fund rules, and outlined the existing opportunities to invest in patient capital.

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