WTW is to launch a private equity-focused long-term asset fund (LTAF), subject to approval by the Financial Conduct Authority (FCA), which is anticipated in the second half of 2024.
WTW sources said the proposed new fund – CG WTW Private Equity Access LTAF (CG WTW PEAL) – “will invest in a range of private equity opportunities including co-investments”, via the new LTAF structure recently introduced by the FCA.
LifeSight, WTW’s defined contribution (DC) pensions master trust with 360,000 individual members, has agreed to allocate up to 5% of its equity default fund into private equity, via the consultancy’s new private equity LTAF.
The fund’s Alternative Investment Fund Manager (AIFM) Carne Global Fund Managers has submitted an application to the FCA for approval. The fund has received initial commitments of over £450m ahead of its launch.
Ben Leach, head of private market solutions in WTW’s investments business, told IPE that the ultimate target for this open-ended fund is to raise around £2bn.
“We have growth ambitions beyond this, but we would view [£2bn] as success,” he said.
WTW said its new private equity LTAF marks the first time WTW’s institutional private equity business has offered a pooled fund to the market, adding that “this supports broader industry initiatives to better align the long-term investment needs of many end investors, including DC pension savers, and invest into assets that, historically, have been harder for DC and private investors to access”.
The LTAF, which WTW expects to be available later this year, will offer investors dedicated private equity exposure. WTW believes that private equity investments, which historically have offered a high illiquidity premium, provide the “greatest opportunity to maximise long-term returns from private markets” and are therefore “where all long-term illiquid DC asset strategies should start”.
The CG WTW PEAL also includes mechanisms to ensure valuation alignment to the net asset value of the underlying assets and liquidity alignment to redemption timing, WTW said. It added that the process will include the use of a third-party valuer, adopting market best practice for investors into evergreen, semi-liquid funds investing into private markets.
Leach said: ”We have made a very deliberate choice to launch a private equity focused LTAF as DC members need growth in their portfolios and growth can come from private equity. So we are doing something with individuals in mind.”
He added that the launch of PEAL is “hugely exciting for investors and is the culmination of three years of development work”.
“Crucially for end savers looking to grow their wealth, they will now be able to access dedicated private equity exposure through a regulated pooled fund structure, the first of its kind in the market,” he continued.
Jelena Croad, head of LifeSight UK, said: “LifeSight is committed to offering increasing value for members. Including private equity in the existing LifeSight default is expected to improve member outcomes and we are extremely proud to be able to offer this to members within our existing fee structure.”
Simon Ellis, chair of trustees for LifeSight, added: “The LifeSight trustee puts members at the heart of everything we do. The trustee has completed a lengthy and thorough governance process to ensure the suitability of the fund and its alignment with the trustee’s commitment to member outcomes.”
CG WTW PEAL is the first private capital evergreen, semi-liquid fund launched by WTW’s private markets solutions team.
Leach said the team has plans “for other long-term solutions to follow, focused on broadening its offering for savers across Europe and Asia-Pacific”. In addition to DC pension savers, the PEAL will also be available to other institutional investors and individual professional investors, WTW added.
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