On 9 August 2022, the FCA issued its latest portfolio letter (Letter) to alternative asset management firms setting out its supervisory priorities.
The Letter is aimed at firms in the FCA's "alternatives" portfolio which mainly includes firms which manage alternative investment vehicles investing in the private markets (such as private equity, credit, real estate, infrastructure and hedge funds) or which manage and advise on alternative assets directly.
Although the Letter does not include anything which is likely to come as a surprise to such firms, it nevertheless is a useful indicator of the FCA's priorities when supervising them and also includes advance notice of forthcoming interaction by the FCA with firms.
The Letter focuses on three main areas of priority for the FCA (which also reflect the FCA's 2022 business plan commitments): consumer needs, integrity of the markets and market abuse, and Environmental, Social and Governance (ESG).
Firms' senior management and legal and compliance teams should review the Letter and ensure that they have the appropriate strategies and procedures in place to address the points raised by the FCA.
We discuss the points in more detail below.