The FCA has approved three Long-Term Asset Funds that will give 700,000 workplace pension scheme members exposure to private markets.
The allocations will be made into Aegon’s £12bn Universal Balanced Collection (UBC) default strategy.
The provider says the changes aim to improve risk-adjusted returns, enhance diversification and provide access to innovative investment opportunities, in areas that have historically been harder for workplace savers to access.
Since October 2024, BlackRock has managed a bespoke, diversified alternative private markets strategy for Aegon UK, including private equity, private debt, real estate and infrastructure.
From H2 2025, Aegon Asset Management’s private credit LTAF will provide diversified exposure to a range of AAM’s leading private credit strategies, including corporate lending, fund financing, insured credit, renewables and asset backed finance.
Also from H2 2025, J.P. Morgan Asset Management’s bespoke strategy, which leverages the firm’s alternatives platform, will offer exposure to private markets such as through private equity, infrastructure, transportation and forestry investments,
completing the UBC’s trio of private market LTAF’s. Aegon says the diversification characteristics offered by the new assets give the UBC the potential for better risk-adjusted returns. Forestry has delivered 15.9 per cent over the last three years, with a very low correlation with other asset classes – the highest correlation being 0.3 – as well as inflation protection.
Aegon’s private credit allocation consists of direct lending to corporates, private equity funds, renewable infrastructure project lending, and governments, with an average of BBB rating. Returns in the past range from 8 to 10 per cent per annum. This is a key strategic business for Aegon Asset Management.
LTAF’s are a new type of regulated fund that invest in long-term, illiquid assets such as private equity, private credit, real estate or infrastructure. Aegon has adopted for a bespoke approach to two of the LTAFs – BlackRock and JPMAM – as this structure gives it a clear line of sight into cashflows in and out across its workplace schemes.
Carne Group, Europe’s largest independent third-party management company, are acting as the Authorised Corporate Director (ACD) of the Aegon Asset Management and J.P. Morgan Asset Management LTAFs.
Lorna Blyth, managing director of investment proposition at Aegon UK said: “The success in receiving authorisation for all three LTAF’s marks real progress in offering our workplace pension members access to the best available asset classes, that are in line with our objective to provide better outcomes and value.
“This tangible action is in line with Government objectives and will allow members to share in the successes of growth companies, as well as the higher returns expected from other alternative investments. Our journey doesn’t end here – next up is our cornerstone investment into the British Growth Partnership, subject to regulatory approval, which will tap into the full commercial potential of world-class breakthrough technology companies based here in the UK.
“We are committed to maintaining our position as leaders in investment innovation, using our scale to access new asset classes and drive better member outcomes.”
