What’s in your wrapper? How access to private markets is evolving for UK investors
As new routes to access private asset classes open through investment platforms, pensions and – soon – mainstream ISAs, wealth managers and advisers have an opportunity to bring greater diversification to client portfolios.
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For years, the benefits of private markets – portfolio diversification, the potential for higher long-term returns and insulation from sentiment-driven, public market performance – have been largely overlooked by private investors.
Our research has shown that larger institutional investors have long been allocating around 15% of their portfolios to private markets. This compares to 5-10% for most advised private clients, with many having less than 5% – and most retail clients having no allocation to private markets at all.
This could be about to change.
The Long-Term Asset Fund (LTAF) structure was introduced to make unlisted, private market strategies more widely accessible. Initially focused on opening these strategies up to pension savers through DC default funds, they are now increasingly seen as an important and complementary access point for private investors, alongside the well-established investment trust sector.
The Financial Conduct Authority’s (FCA) 2023 move to re-classify LTAFs as “Restricted Mass Market Investments” (RMMIs) was an important milestone. However, before Schroders’ recent partnership with Hargreaves Lansdown, this opportunity was theoretical, not practical. While the rules allowed for direct retail client access, the market had not yet caught up; until now.
Today the opportunity is about momentum: product innovation, growing demand and strong policy alignment are bringing LTAFs within practical reach for private investors, including from April 2026 through mainstream stocks and shares Individual Savings Accounts (ISAs).
What’s driving the current wave of change?
From the investor side, this is about choice. As investors seek alternatives to listed equities and bonds, interest in non-traditional assets has grown. Private markets can provide exposure to companies and infrastructure projects not available through public markets, often delivering returns uncorrelated with broader market cycles.
As the FCA itself said in its policy statement on the shift to reclassify LTAFs: “Some retail investors seek out non‑traditional investments in a search for diversification or higher returns... We want investors to be able to access suitable investments that match their attitude to risk.”
Of course, for many years there has been a range of existing and established investment trusts providing easy exposure to private asset classes in a highly liquid format. But for those looking for access that is less exposed to public market dynamics and sentiment, the LTAF provides a new and complementary allocation option.
From the policy side, this is all about securing better long-term outcomes for savers and encouraging more productive capital. The government wants more people saving, and more of those already saving to be investing, helping secure their long-term futures. At the same time, greater participation in capital markets, including private markets, is expected to channel more investment into UK growth companies and real asset projects, boosting the real economy.
For example, under the Mansion House Accord 17 defined contribution (DC) pension providers (representing more than 90% of the market) have pledged to allocate 10% of their assets into private markets by 2030, of which half will be dedicated to the UK. The Government expects this to unlock £25 billion or more for the UK economy.
LTAFs focused on this segment are the key to enabling this shift. Enabling more opportunities for eligible private investors to direct their capital into similar vehicles will help to amplify this trend.
How can investors now access private markets?
Many people are already exposed to private markets, albeit indirectly, through their pension. Defined benefit (DB) pension schemes have long invested in asset classes like real estate and infrastructure to improve diversification and resilience. DC schemes are now following suit and seeking to add private markets exposure, with LTAFs providing the mechanism for default fund allocations.
Building on these foundations, what’s emerging is greater choice for self-directed and advised private investors, with the potential to encourage increased allocations into private market asset classes – of course, only where suitable. This has the potential to close the private markets investment gap with their institutional counterparts.
Historically, investment trusts were the only viable investment option for most retail clients, and private investors faced high (or even insurmountable) entry barriers to more institutional-style vehicles: minimum investment thresholds, limited liquidity, and the absence of private market funds on major retail platforms.
That’s now changing. Schroders’s partnership with Hargreaves Lansdown, the UK’s largest investment platform, marks a breakthrough. For the first time retail investors can access directly two new Schroders Capital LTAFs investing in private equity and energy transition infrastructure through their self-invested personal pensions (SIPPs). From a policy point of view, this makes perfect sense. With long time horizons, and engaged and often advised clients, private market LTAFs can be a well-aligned allocation option for SIPP investors, especially in the accumulation phase.
This therefore opens a new, direct and regulated route to institutional-grade private market investments for private clients. In April 2026, access is expected to widen further when LTAFs become eligible within stock and shares ISAs, a development expected to increase investor demand significantly.
Indeed, that demand is already apparent. According to Investment Association research, 57% of retail investors say they would consider investing in illiquid assets through LTAFs, including over 70% of respondents who are Millennials (aged 28-43) and 75% of those in Generation Z (aged 18-27).
The next generation of investors is clearly open to long-term, less liquid and diversifying strategies that can also align with broader sustainability and impact objectives.
What should investors and platforms looking to add LTAFs keep in mind?
Unlike daily-dealing or listed funds, LTAFs typically offer monthly subscriptions and monthly or quarterly redemptions with greater than 90 days’ notice. This structure reflects the long-term nature of the underlying assets, helping managers to balance the levels of cash in the fund with any redemptions.
For platforms and SIPP providers, managing these different dealing dynamics requires flexible operational systems and, in some cases, new processes. For example, the need for more nuanced customer journeys that incorporate regulatory requirements and best practice in testing investor understanding is increasing, not least as a result of growing demand for crypto related investments.
Moreover, because private market funds are often classified as “non-standard investments”, some SIPP platforms may need hold additional regulatory capital to reflect higher complexity and operational risk if a substantial portion of clients’ assets are allocated to them.
These factors may deter some smaller platforms and providers from offering LTAFs immediately, though as the market matures, efficiencies and standardisation could lower these barriers.
On the investor side, advisers play a crucial role in assessing whether private market exposure fits within a client’s overall financial plan. Investors must be comfortable with a long-term horizon, understand the illiquidity premium they are targeting, and recognise that valuations are typically reported less frequently than for listed assets.
Costs are also higher than for public market funds, reflecting the need to source and structure private investments, the depth of due diligence required, and the active management required in these markets. For most products though, if target returns are achieved, they should more than compensate investors for these additional costs, on a risk adjusted basis.
What does this mean for wealth managers and advisers?
The broadening availability of LTAFs represents a new frontier for portfolio construction.
Until now, advisers could only access private markets through listed investment trusts, or as a component of a multi-asset vehicle. The arrival of accessible, regulated structures designed specifically for private markets opens up more avenues to deliver diversification – and potentially, more resilient long-term returns.
Market infrastructure is now catching up with this innovation, with policy driving the evolution of access to these vehicles via mainstream and ubiquitous tax and pension wrappers. This should help to break down the key remaining barriers to LTAF adoption, setting the stage for increased allocations that reflects the growing demand that investors are reporting for access to private markets.
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