Speech by Sarah Pritchard, deputy chief executive, at the Investment Association’s Private Markets Summit 2026. Headlines are always a tough read when funds run into difficulty.And lately, the language has been stark.Some have even asked if private credit has a canary in the coal mine.That’ll make you sit up a bit straighter, won’t it?But in this moment, it’s important to remember that stress in markets is normal – and okay, as long as the system stays resilient.Private markets, done well, can support resilience.But the range of things we need to plan for is wider than it once was, and the challenges are becoming increasingly uncertain.We know there will be situations where stress could be a problem. Those are the ones we need to plan for. Early, and together.And with the entire system in mind.That’s why we are supporting the Bank of England’s new system-wide exploratory scenario (SWES) focused on risk in private markets – so we can support a joined-up view of how these markets may function under stress.I’m often asked whether conduct risks are important.Let me be clear: while different to financial stability risks, they are no less important.They can harm investors, erode market integrity and undermine trust.Those are the risks we’re looking at.And we’re looking at them early. Taking a system-wide view. And publishing our findings so that the market is clear on our expectations.You see this in our valuations work.We know that robust valuation frameworks and processes are key to investor confidence and critical to market integrity.They are not there to eliminate judgement, but to ensure that judgement is robust, well evidenced and capable of standing up under pressure.Our report, published in March 2025, set out expectations and good practice for governance in valuation processes. There’s already been tangible change across the sector.But confidence is earned over time, not through a single review.So we’ll continue to engage at both firm and industry level – and we expect to see clear evidence of how firms have reflected on the findings and embedded them in practice.Because in private markets, confidence is rarely lost when valuations change.It’s lost when they change without explanation, or too late.We are taking the same approach in our multi-firm review of conflicts of interest, which is currently underway.We are focusing on conflicts because confidence rests on knowing decisions are made in investors’ interests, with incentives aligned to delivering long?term outcomes.We’ve already gathered information about how firms identify conflicts and design their frameworks.Next, we’ll consider how they operate in practice before publishing our findings later this year.These conduct risks matter and should be taken seriously.We need to train the spotlight on those places where standards may not hold under pressure.Because in private markets, many problems can be traced back to first-line controls that have broken down – or appear to have done so.We’ve seen this recently.A major US private credit firm was forced to cap investor withdrawals after redemption requests worth billions came in within a single quarter.It maintains that its underlying loans are sound and the mad dash for the exit was brought on by negative sentiment. Not reality.That may well be true.But the surge in withdrawal requests tells us something important.When investors can’t see clearly into a portfolio, they won’t wait to find out what’s there.The loss of confidence didn’t happen because controls had visibly broken down. It happened because investors couldn’t trust that they hadn’t.The question isn’t whether there will be turbulence. There will be.It’s whether the system can handle it.Which brings me to what I think truly matters: where confidence comes from.Because it doesn’t come from ignoring risk, or pretending it simply isn’t there.
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