Fund manager Schroders has launched the UK’s first long-term asset fund (LTAF) designed to be used by financial advisers and wealth managers.

The LTAF is the fourth for the fund manager and has received regulatory approval from the FCA.

Schroders launched the UK’s first LTAF in April 2023 although other fund managers have so far been reluctant to join them.

LTAF's are designed to encourage long-term investment in sectors seen as relatively illiquid but which benefit the UK economy.

Previous LTAFs from Schroders and other fund managers have concentrated on allowing defined contribution pension funds to access private markets and have been structured as authorised contractual schemes.

The newly launched Schroders Capital Wealth Solutions LTAF has been designed as an open-ended investment company (OEIC), meaning it can be made available to the UK wealth market.

The first fund added will be the Schroders Capital Global Private Equity LTAF, a feeder fund into an existing strategy, the Schroders Capital Semi-Liquid Global Private Equity Fund. This fund, launched in September 2019, has grown to over $1.8bn (£1.3bn).

Managed by head of global private equity portfolios, Benjamin Alt, the fund is focused on small-mid market buyout and growth investments globally. These encompass US and European SME buyouts and Asia growth companies, with a strong focus on technology and healthcare sectors.

Mr Alt said: “We are now able to bring the best of our expertise in private equity to UK private clients in a UK approved structure. This means access to the most attractive segments of private equity markets globally through a well-established fund with a proven track record.

“Private equity enables investors to access different parts of the economic ecosystem, bringing the potential for robust investment performance and the benefits of diversification.” 

Schroders said that is expects the new LTAF to be used as a complementary tool to existing private market structures such as investment trusts.

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 markets.