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Consumer protection should be paramount

13 December 2018

AIC responds to FCA’s patient capital discussion paper.

Responding to the FCA’s discussion paper Patient Capital and Authorised Funds, the Association of Investment Companies (AIC) believes that consumer protection should be paramount in the design of any new fund structures.

The discussion paper (DP18/10) raises the possibility of creating a new kind of authorised fund structure that would be able to offer retail investors exposure to ‘patient capital’ assets, such as infrastructure, real estate, private equity/debt and venture capital.

Ian Sayers, Chief Executive of the AIC said: “It’s good that the FCA is thinking about ways to invest more in patient capital. As the discussion paper points out, closed-ended investment companies already offer professionally managed access to assets such as infrastructure, property and private companies, and their shares are readily tradeable on the stock market. We also have a 23-year record of investing in venture capital via VCTs.

“Ensuring that consumers have the right to sell their investments at a time of their choosing has been a cornerstone of UK funds regulation for decades. If new open-ended fund structures holding illiquid assets are to be created for retail investors, consumers must be warned if these protections are to be reduced. Given the inherent uncertainty over the value of illiquid assets, and the practical experience that the disposal of illiquid investments is often at a very different price to the latest valuation, great care will be required to ensure that investors entering or leaving the fund pay or receive a fair price.”


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  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 355 members and the industry has total assets of approximately £182 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.
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