On 12 December 2018, the FCA published Discussion Paper 18/10: Patient Capital and Authorised Funds (DP18/10). The FCA has published DP18/10 alongside a consultation paper on changes to permitted links rules to facilitate investment in patient capital.

In DP18/10 the FCA explores the impact of the regulatory regime on investment in patient capital assets through authorised funds. ‘Patient capital’ refers to a broad range of alternative investment assets intended to deliver long-term returns; for example, infrastructure, real estate, private equity / debt and venture capital. These assets are typically illiquid and often require a committed investor willing and able to tie up their capital and forgo on-demand liquidity or an immediate return on investment.

In DP18/10 the FCA provides an overview of the existing regime to invest in patient capital through UK authorised funds and specialised funds. The FCA is seeking views on whether the regime provides investors and fund managers with appropriate access to patient capital investments while maintaining the right level of consumer protection. Specific questions are set out in chapters 3 and 4 on patient capital in authorised funds and patient capital in specialised funds respectively.

The deadline for comments on DP18/10 is 28 February 2019. After the deadline for comments, the FCA intends to publish a feedback statement – and if the FCA feels the need, a consequent consultation paper will be published in 2019.