Schroders has launched the UK’s first ever retail-focused Long-Term Asset Fund (LTAF), as the investment vehicle finally starts to become available to the wider market.
The LTAF, which will be available to wealth managers with retail clients, is the first LTAF Schroders has launched not targeted at pension schemes, charities, or institutional investors.
James Lowe, director of private markets at Schroders, described the launch as a “significant step forward” for the LTAF project, comparing the future role of the funds to investment trusts in allowing investors to access private markets.
Traditionally, retail investors could only access alternative investments like private equity and private credit through trusts, but the introduction of the LTAF to the market has begun to shift this.
Now, the Schroders Capital Wealth Solutions LTAF is an open-ended investment company (OEIC) so that it can be marketed to the UK wealth market, rather than the previous three LTAFs from Schroders which were under the authorised contractual scheme (ACS) framework.
The LTAF will worked as an umbrella structure to hold other LTAFs, with the first fund launched under it being the Schroders Capital Global Private Equity LTAF, feeding into the asset manager’s $1.8bn private equity fund which launched in 2019.
Schroders’ move comes following approval from the Financial Conduct Authority earlier this month for the group to launch the first ever LTAF focused on UK venture capital.
“Private equity enables investors to access different parts of the economic ecosystem, bringing the potential for robust investment performance and the benefits of diversification,” added Benjamin Alt, head of global private equity portfolios at Schroders Capital.
Alt will also manage the fund, with it focusing on small-mid market buyout and growth investments globally, from American and European small and medium enterprise buyouts to Asia growth companies, with a strong focus on tech and healthcare.