Schroders Capital today announces it has received regulatory approval for its first UK Wealth market focused Long-Term Asset Fund (LTAF), a significant milestone as the firm focuses on providing investors with a broader selection of access points to private markets.
Earlier this month, Schroders Capital announced another market first after receiving approval for the first LTAF dedicated to UK venture capital.
LTAFs, a funds regime authorised by the UK’s Financial Conduct Authority, are designed to enable UK investors with longer-term horizons to invest in illiquid assets. The majority launched to date have allowed defined contribution (DC) investors 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 launched 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 $1.8 billion[1] and has a robust five-year track record.
Managed by Schroders Capital’s 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.
James Lowe, Director, Private Markets, Schroders, said:
“This is a significant step forward; we believe that for the UK wealth community LTAFs will provide another access point to private markets and we expect this LTAF to be a complementary tool to existing private markets structures – like investment trusts - offering new flexibility in how UK investors will be able to meet their objectives via private market investments.”
Benjamin Alt, Head of Global Private Equity Portfolios, Schroders Capital, 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.”
The firm is already a market leader in offering structures which provide greater access to private assets through its range of listed vehicles, as well as semi-liquid and illiquid structures. This will be Schroders’ fourth LTAF, having launched the UK’s first in April 2023.
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Risk Considerations
Currency risk: The fund may lose value as a result of movements in foreign exchange rates, otherwise known as currency rates.
Emerging Markets & Frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
Interest rate risk: The fund may lose value as a direct result of interest rate changes.
Liquidity risk: The fund invests in illiquid instruments, which are harder to sell. Illiquidity increases the risks that the fund will be unable to sell its holdings in a timely manner in order to meet its financial obligations at a given point in time. It may also mean that there could be delays in investing committed capital into the asset class.
Market risk:The value of investments can go up and down and an investor may not get back the amount initially invested.
Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.
Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.
Private Equity risk: Private equity strategies are subject to a variety of risk conditions, including, but not limited to, the risk that too much ispaid for acquiring a business, new or unproven management, new or less mature business strategies or unsuccessful integrationwith existing businesses.
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Schroders Capital
Schroders Capital provides investors with access to a broad range of private market investment opportunities, portfolio building blocks and customised private market strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private market mandates.
The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration and integrity.
With $97.3 billion (£77.0 billion; €90.8 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).
*Assets under management as at 30 June 2024 (including non-fee earning dry powder and in-house cross holdings)
Schroders plc
Schroders is a global investment manager which provides active asset management, wealth management and investment solutions, with £773.7 billion (€912.6 billion; $978.1 billion) of assets under management at 30 June 2024. As a UK listed FTSE100 company, Schroders has a market capitalisation of circa £6 billion and over 6,000 employees across 38 locations. Established in 1804, Schroders remains true to its roots as a family-founded business. The Schroder family continues to be a significant shareholder, holding approximately 44% of the issued share capital.
Schroders' success can be attributed to its diversified business model, spanning different asset classes, client types and geographies. The company offers innovative products and solutions through four core business divisions: Public Markets, Solutions, Wealth Management, and Schroders Capital, which focuses on private markets, including private equity, renewable infrastructure investing, private debt & credit alternatives, and real estate.
Schroders aims to provide excellent investment performance to clients through active management. This means directing capital towards resilient businesses with sustainable business models, consistently with the investment goals of its clients. Schroders serves a diverse client base that includes pension schemes, insurance companies, sovereign wealth funds, endowments, foundations, high net worth individuals, family offices, as well as end clients through partnerships with distributors, financial advisers, and online platforms.
Issued by Schroder Investment Management Limited. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.
[1] As of 30 June 2024