The financial services giant has also launched a new range of target-date funds under the brand “Lifetime Advantage”.
The launch forms part of a range of new strategies for DC funds unveiled today by the financial services giant.
The L&G Private Markets Access Fund is structured as a fund-of-funds vehicle and invests in a new long-term assets fund (LTAF), as well as third party funds, other L&G funds, and directly held liquid assets. This structure, the company said, would allow support for daily dealing while still providing access to illiquid asset classes.
Alongside the Legal & General Private Markets LTAF, the Private Markets Access Fund will also aim to provide exposure to “investments that are not typically accessible through public markets”, the company said, such as clean energy, affordable housing, and infrastructure.
The company has been working on the launch since 2022, and its work in this area contributed to its support for then-chancellor Jeremy Hunt’s Mansion House Compact, which was launched last year to support private sector investment in UK growth assets.
Companies including the London Stock Exchange Group and EDF Energy have already expressed interest in the Private Markets Access Fund.
Rita Butler-Jones, head of DC at L&G, said she believed the new fund would be “a game changer for DC pension savers”.
“Our members are at the core of what we do, and we believe providing millions of savers with exposure to the potential returns available through global private markets will support the delivery of better long-term retirement outcomes,” she said.
“When developing the fund, we have spent a lot of time talking to clients about what is important to them, ensuring that the assets align to our members’ long-term investment horizons, while delivering value for money.”
António Simões, L&G’s group chief executive officer, said: “Today’s launch is an important step forward in putting UK pension capital to work to drive economic growth while supporting people to build the savings they need for retirement.”
L&G has also launched a range of target-date funds, called the L&G Lifetime Advantage Funds. Each will start with 100% allocation to growth assets for members in the early stages of pension saving, including a “meaningful” investment in the Private Markets Access Fund. These funds are designed to “evolve as members’ needs change”, L&G said.
Historically, DC investors have encountered operational, liquidity, and governance challenges when investing in private markets through structures with daily pricing and dealing.
However, since the establishment of the LTAF structure last year, there have been several new offerings launched in this area. Aviva Investors now has two LTAFs, and both WTW’s LifeSight master trust and HSBC’s DC scheme have both allocated to newly launched LTAFs this year.
Further reading
Schemes eager to back government’s infrastructure investment drive (30 April 2024)
Next phase of Mansion House reforms announced (21 November 2023)
