PLSA IC 22: Courageous administrators were to be the “first comers” of the LTAF
It will take a brave set of directors to be the first to enter the long-term asset fund (LTAF) regulated by the Financial Conduct Authority (FCA), advised Joanna Asfour, global head of consultant relations at Partners Group.
In October 2021, the FCA finalized the rules for its LTAF framework with the aim of encouraging greater investment in long-term illiquid assets, generating better returns for savers and addressing “market failure”. DC pension plans that do not invest in long-term assets. illiquid assets, despite the investment horizon to do so.
Speaking at the PLSA investment conference in Edinburgh, Asfour said: “It will take a brave set of directors to dive into the LTAF world and make it happen. I think the investment management community is ready, the consultants are advising on private markets and the investment platforms are ready to adapt, but it will take those [trustee] first arrivals. »
Also speaking at the event, Barnett Waddingham’s partner Sonia Kataora said: “It’s harder to get DC members than inflation plus the return they need. You can’t rely solely on public equities, which most DC plans have survived.
“What private markets allow you to do is expand that set of opportunities. You know that there are more private companies on the market than public companies. You know that private companies stay private longer, and it’s usually in those early stages that there’s the most value to be had.
“If you stay in publicly traded equities, you are potentially missing out on that value. wider for private lending”.
Also on the panel, CIS’s head of Phoenix Corporate Investment Services, Jess Williams, explained that the conversations she has about including private assets on investment platforms revolve around operational and practical issues.
For that, “there will be additional administration that will be required, additional operational governance, and I think as we stop moving forward, it will be quite manual to begin with, with a degree of manual intervention higher,” she added. said.
“But none of those things are insurmountable.”