FCA turns attention to private market valuations

Questions if a valuation correction is due

This month the UK’s financial regulator, the Financial Conduct Authority, said at its annual public meeting (October 4) that it would be launching a review into private markets, as part of its joint evaluation with international regulators of the risks the non-bank sector could bring to financial stability.

Such a review could examine how valuations for unlisted assets are being understood and whether any risks could spread into the banking sector. Despite rising interest rates and inflation, prices of assets in the $13trn private markets have remained relatively high, raising questions about how their valuations are conducted and if a correction is due. FCA to open review of private markets valuations - reports FCA chief executive Nikhil Rathi said that the regulator anticipates that an adjustment in private markets valuations will emerge in a higher interest rate environment, follow...