Schroders Capital, the private assets division of Schoders, is aiming to launch the UK’s first long-term asset fund by the end of March, after today receiving regulatory approval from the UK’s Financial Conduct Authority (FCA).
LTAFs are regulated open-ended investment vehicles designed to enable a broader range of investors, with longer-term horizons, to invest efficiently in illiquid and private assets.
The new fund will focus on providing opportunities for UK pensioners paying into defined contribution (DC) schemes to access myriad opportunities across Schroders’ private asset investment expertise.
Peter Harrison, Schroders’ group chief executive officer, said: “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, which is 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.”
David Seex, head of private asset solutions at Schroders Capital, said the firm is dedicated to innovating and providing investors with ways “to unlock the broadest range of investment capabilities”.
He added: “The LTAF regime is an exciting regulatory initiative that will allow pension savers to invest in private assets and we are focused on leading with our own solution.
“Of course, it is important for investors and their advisers to be clear as to the long-term nature of private investments and when and how they will be able to access their funds. Key considerations should be the liquidity profile of their investment and how this fits with their investment horizon.”
The LTAF is a new category of open-ended authorised fund designed to invest efficiently in long-term assets. The FCA enabled the innovation by creating a new regulatory regime that came into force in 2021.
Sarah Pritchard, the FCA’s executive director of supervision, policy and competition – markets, said: “We made these rules to create an environment where investors that wish to invest in productive finance assets can more easily do so. It was for market participants to make this a reality and it is good to see this product innovation now taking place.”