UBS has discussed overhauling the management of a $1bn sustainable finance fund that works with development agencies such as the World Bank amid concerns about Record’s push into private markets. The Swiss bank has in recent months held discussions about whether it needs to find an alternative manager for the fund, according to people familiar with the matter, despite obstacles to moving a fund with illiquid investments that could affect development projects in emerging economies. UBS recently completed a review of the fund, deciding to stick with the strategy and retain Record as manager, according to people familiar with the matter.

But discussions about Record’s role are “likely to continue”, one of the people said. The $1bn fund is one of UBS’s largest sustainable investment strategies and one of the few of its kind operated by a private institution, allowing agencies such as the World Bank and African Development Bank to hedge currency risks on development loans. The capital to take on this risk is provided by wealthy UBS clients.

The relationship between UBS and Record has soured following a change of direction at the Record-listed company, which has recently moved beyond its core currency hedging business towards higher-fee areas such as managing private equity, infrastructure and private debt assets, according to people familiar with the matter. Record has attempted over the past three years to expand into private markets through initiatives that include a sharia-compliant supply chain finance fund, as well as a $2.2bn agreement to finance a potash mine operation in Canada. People familiar with the projects say neither has progressed.

Options discussed by UBS have included replacing Record as manager of the fund, which has delivered 5.7 per cent in annualised returns in the five years to July 2026, according to people familiar with the matter. The bank has also weighed less dramatic changes, including bringing in different managers to perform some functions currently handled by Record, the people said. Record, a Windsor-headquartered specialist in currency hedging, was founded by Michael Platt, a UK Conservative party donor who backed Boris Johnson’s bid for the party’s leadership and also chairs climate action-sceptical group Net Zero Watch.

Its failure to attract more assets to the UBS fund beyond the money initially raised by UBS was also a factor in the discussions, the people said, adding that UBS wealth clients still account for about 95 per cent of the total assets. UBS said: “We recently completed a review of the Emerging Market Sustainable Finance Fund as part of our regular oversight process. The review confirmed our continued conviction in the fund, its portfolio managers and the strategy, which has exceeded expectations since launch.”Record declined to comment on its relationship with UBS, but said its private markets projects had “no impact on the resourcing or focus” of the team running the emerging markets finance fund, which had shown “strong performance”.

The discussions highlight the challenges for large banks in overseeing specialist external managers as they expand into private markets such as private equity, infrastructure and private credit, where investments tend to be more complex and illiquid. UBS in 2022 also helped launch a technology-focused fund with private credit firm Blue Owl, which has suffered significant withdrawals after the bank told some clients to cut exposure to the sector, the FT previously reported. In June, Record reported a 23 per cent fall in profit after tax for the 12 months to March 2026 and cut its final dividend.

It has said private markets will drive revenue and earnings growth over the medium term but its shares are down about a fifth this year. Michael Platt stepped down from his eponymou...