Future Growth Capital (FGC) — the private markets joint venture between Phoenix Group and Schroders — has launched two diversified long-term asset funds (LTAFs).
One of these LTAFs will be a global strategy with the other will be focused on a UK strategy. Both offer actively-managed, exposure to private equity and venture capital, real assets and private debt, and are designed to deliver long-term performance, targeting a 10 per cent investment return after fees per annum.
The global LTAF focuses on assets from private markets in the US, Europe and Asia and is a blended strategy aiming to deliver a smoothed long-term risk and return outcome.
The UK LTAF offers investors the opportunity to take advantage of the investment opportunities available in UK private enterprise and UK development projects. FGC points out that this offers an efficient way to balance and diversify portfolios now that 36 per cent of the UK’s 500 largest companies are privately held.
It also offers investors the opportunity to participate in the UK’s energy transition, for which circa £900bn of investment in energy infrastructure is needed for the UK to meet its energy transition goals.
Separately, FGC has confirmed that this UK LTAF made its first investment in line with the aims of the UK Government’s long-term investment for technology and science (Lifts) initiative, reflecting its aim to help grow the UK businesses of the future, and capture the investment returns available for UK pension savers. It adds that the British Business Bank has invested £250m into the LTAF under the initiative.
FGC chief executive Paul Forshaw says: “We’re excited to be launching these two strategies, designed to unlock private market investments for UK pension savers, efficiently and cost-effectively.
“By offering complementary global and UK LTAFs side by side we are giving investors the option to decide exactly what their markets exposures should be, at a time when investment allocations to the UK are increasingly in focus.”
FGC chief investment officer Ped Phrompechrut says: “Private markets are essential building blocks to deliver better pension outcomes. Often overlooked is that UK private markets are broader and deeper than many recognise and offer a rich seam of investment return potential.
“The UK is a hub of innovation, the third largest venture capital market in the world, and the leading supplier of unicorn businesses in Europe. There are great investment opportunities for investors, and we aim to capture these for UK pension savers, alongside providing access to a global strategy.’’
FGC is a new private markets investment business established by Phoenix Group, the UK’s largest long-term savings and retirement business with 12m customers and Schroders, the global investment manager with a $99.3bn (£79.3 billion) private markets capability.
FGC aims to deploy £10-20bn over the next decade into private markets, investing globally and in the UK, in support of the Government’s Mansion House objectives, to boost retirement savings for UK pension savers through higher investment returns, and to unlock long term finance to fuel UK growth.
Phoenix Group, which owns workplace savings provider Standard Life, says it intends to invest 5 per cent of its relevant savings products on behalf of its policyholders via investment products managed or advised by FGC, in line with its Mansion House Compact commitment.
