Schroders to set up Britain’s first new-style private asset fund

Schroders won regulatory approval to set up the UK’s first private asset fund targeting individuals.

The UK’s largest standalone asset manager is the first firm to receive regulatory approval for a so-called Long Term Asset Fund, said a statement on Thursday (Mar 9). The LTAF is a new regulatory structure designed to give sophisticated investors access to illiquid assets, including private equity and venture capital.

Schroders will market the fund to defined contribution and other eligible investors, added the statement.

“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,” chief executive officer Peter Harrison said in the statement.

Schroders is part of a growing cohort of traditional fund houses looking to push deeper into private markets to compete against low-cost index funds that have been luring away clients. Other asset managers including Abrdn and M&G are also looking for ways to bring semi-liquid funds to the UK’s wealth market.

The Financial Conduct Authority said it has worked with the Bank of England, the Treasury and the industry to “create an environment where investment in longer-term, less liquid assets, by investors who understand the risks, can flourish”, said a separate statement from the regulator on Thursday.

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BlackRock is starting two private equity funds targeting wealthy individuals in Europe, as the world’s largest asset manager seeks to tap rising appetite for alternatives among the rich. 

The New York-based group expects to raise about one billion euros (S$1.4 billion) or more for the new European Long-Term Investment Funds, said Edwin Conway, global head of BlackRock Alternatives. Bloomberg