What Is Patient Capital and Who Supplies It?

Patient capital, most commonly provided by banks, has a central role in underpinning the varieties of capitalism distinction between “Anglo-Saxon” and Continental European economies, whether this is the long-term holding of equity, long-term bank lending or a willingness of lenders to support non-financial companies through difficulties. Central to investor and lender patience has been their relationship with an NFC. The recent rise of “market-based banking” has questioned the continued ability of commercial banks to provide patient capital, and continued financial innovation has increased the range of financial institutions potentially able to replace them. We consider the nature of patient capital, both debt and equity financing, arguing that relationships between capital providers and NFCs are not necessary for patient capital, and that a relationship is no guarantee of patience. We build on this insight by considering a range of financial market actors as potential providers of patient capital and examining their relative prevalence across developed economies.