Schroders has received approval to launch the UK’s first long-term asset fund (LTAF).
This new regulated fund is an open-ended vehicle designed for investment into a broad range of illiquid and private assets, which typically have longer-term investment horizons. They have been specifically designed to help DC pension fund invest in illiquid investments such as real estate, private equity, private debt and infrastructure.
Following regulatory approval from the FCA, Schroders Capital, the private assets division of Schroders, will focus on providing DC and other eligible investors with the opportunity to access its range of private asset investment capabilities.
Schroders already offers a range of listed vehicles, as well as semi-liquid and illiquid fund structures to private assets. Last year Schroders was appointed by Nest, the UK’s largest workplace pension scheme, to manage a private equity DC allocation.
Schroders group chief executive Peter Harrison says: “We feel strongly that a wider range of UK savers must be able to take advantage of the robust returns and diversification benefits that investing in private assets can bring.
“There are some great industries and firms which could be further supported by long term capital. The LTAF structure is designed to address this and I am delighted that the imminent launch of Schroders’ first LTAF, the first to be approved in the UK, will enable these companies to start benefiting from big pools of long-term capital and, in turn, help long term savers.”
Tim Horne, Head of UK Institutional DC, Schroders, adds: “Private assets have the potential to help DC investors achieve their aims of a good outcome in retirement. The LTAF regime has been specifically designed to provide a regulated fund structure that provides a framework to invest into these assets. At Schroders we have been at the forefront of DC investment innovation and we are now focused on launching a private markets solution to best meet the needs of UK retirement savers.”
Schroders Capital has $91 billion of assets under management.