Future Growth Capital — the joint venture created by Schroders and Phoenix Group in July — has received approval to launch the first UK-dedicated multi-asset long-term asset fund (LTAF).
The vehicles invest in long-term, illiquid assets such as private equity and infrastructure, and until earlier this year, were only accessible to institutional investors.
They became more widely available in July as part of the former chancellor’s Mansion House Compact as a means for pension funds to invest an additional £75bn into UK growth assets they previously struggled to access. Future Growth Capital was set up in response to that.
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Its newly approved Schroders Future Growth Capital UK Private Assets LTAF will put money into underinvested UK private assets and venture capital businesses. In doing so, it hopes “to promote the UK’s private markets ecosystem, further enhancing the UK as an attractive destination for international investors,” according to Schroders.
Paul Forshaw, chief executive at Future Growth Capital, said: “This is a significant step forward for our new business and for UK pension capital. It will be the first LTAF entirely aligned with the Mansion House Compact, connecting long-term savings directly to the most attractive private UK companies, supporting these exciting businesses to grow and stay in the UK.”
This new fund will be launched in conjuncture with a global version that follows the same strategy called the Schroders Future Growth Capital Global Private Assets LTAF.
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Together, both strategies will invest an initial £1bn into their respective markets, which could increase by between £10-20bn over the next decade.
Forshaw added: “The Schroders Future Growth Capital Global Private Assets LTAF will provide long-term savers with the benefits of further diversification across the spectrum of international private assets. Importantly, both LTAFs have the potential to deliver better long-term retirement performance.”
These new funds will be the fourth and fifth LTAFs to be launched by Schroders this year, which has been ahead of its peers in releasing these new products to pension clients.
