Legal & General (L&G) has launched a private markets fund for defined contribution (DC) pension schemes.
The L&G Private Markets Access Fund offers DC investors access to a diversified portfolio of private market assets, including private equity, real estate, private credit and infrastructure.
The fund is designed specifically for DC schemes and is structured as a fund of funds, with an investment in a new private markets Long Term Asset Fund (LTAF), called the Legal & General Private Markets LTAF, sitting alongside exposure to liquid securities, as well as L&G and third-party funds.
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L&G’s strategy will also include allocations to unlisted equities, with the ability to allocate up to 40 per cent into UK assets.
The overall offering launched on 1 July 2024, while the LTAF received regulatory approval from the Financial Conduct Authority in May.
“The fund is a one-stop-shop for private market exposure and we hope it will inspire DC members into greater engagement with their pension, by investing in tangible assets which can benefit the real economy,” said Rita Butler-Jones, head of DC at L&G.
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The L&G Private Markets Access Fund aims to provide DC investors with the benefits of the illiquidity premium of private markets assets without the typical operational, liquidity and governance challenges that come with investing in private markets.
The fund will be available for DC schemes to invest in directly and via the newly launched L&G Lifetime Advantage Fund default strategies.
L&G said that the strategy has already attracted interest from clients, including the London Stock Exchange Group, EDF Energy and L&G’s own DC pension scheme.
The announcement comes after L&G’s recent strategic update, in which the group announced that it would merge its public and private markets capabilities in a single asset management division and target growth in its workplace DC pensions business.
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“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,” said António Simões, group chief executive of L&G.
“Building on our refreshed strategy set out in June, this fund will offer defined contribution scheme savers access to high growth investment opportunities, provide innovative funding for communities, society and the real economy, and power L&G’s private markets growth ambitions.”
Macfarlanes provided legal advice to L&G for its private markets LTAF, while Northern Trust is acting as the depositary and fund administrator.
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