Fidelity approved to launch first LTAF

Fidelity International has become the latest firm to receive Financial Conduct Authority approval to launch a long-term asset fund (LTAF).

The Fidelity Diversified Private Assets LTAF will provide globally diversified private markets exposure across private equity, private credit, infrastructure, real estate and natural resources, as well as exposure to public assets for liquidity purposes.

The asset manager said it will seek to provide diversified private assets exposure for investors in a single wrapper and may serve as a complement to a traditional public assets portfolio.

The strategy is to focus on high-quality private asset funds globally, giving consideration to environment, social and governance sustainability risks, and implementing Fidelity International’s firmwide exclusions list.

Read more: LTAFs look to diversify private markets exposure with multi-asset focus

The LTAF aims to provide greater access to private assets within an open-ended structure for defined contribution schemes to enhance retirement outcomes for members.

However, Fidelity has not ruled out the LTAF being an attractive investment for eligible professional investors with longer-term investment horizons.

Read more: Fulcrum LTAF gains FCA approval

“Today, a number of clients are already asking to include private assets in their solutions, and we only expect this to grow over the coming years,” said Fidelity International global head of solutions and multi asset Henk-Jan Rikkerink.

“In a world of challenged returns and reduced diversification from more traditional asset classes, clients are looking for a wider range of options to meet their long-term investment objectives.”

He added: “We believe that investing in private assets broadens the investment opportunity set and will improve the risk-adjusted returns and diversification characteristics of a portfolio over the long term.”

Read more: Arcmont receives green light to launch private credit LTAF