FutureWise pension scheme invests in Fidelity LTAF
Fidelity International’s FutureWise pension scheme has become the first investor in the Fidelity Diversified Private Assets long-term asset fund (LTAF).
FutureWise is Fidelity International’s default investment strategy for UK-based workplace pension schemes and has assets under management of approximately £16.9bn. The LTAF investment is designed to provide members with diversification across multiple private asset classes including private credit, private equity, infrastructure, real estate and natural resources.
The integration process will begin in 2025 when the LTAF has launched. FutureWise plans to increase exposure gradually to the LTAF over three years, until it reaches a target allocation of 15 per cent invested in the LTAF in the growth phase.
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Fidelity International is one of the largest pension providers in the UK with more than 700,000 defined contribution (DC) members.
“Incorporating private assets into our default strategy is a significant milestone for members as they save for retirement,” said Stuart Warner, global head of platform solutions, Fidelity International.
“The pensions adequacy gap is very real and will create significant retirement issues for individuals over the coming decades if we do not address and enhance overall member outcomes. For our DC members whose investment horizon is measured in decades not years, we believe there is strong alignment in the benefits of private market investments and member objectives.
“Fidelity International is highly supportive of emerging efforts to unlock so-called ‘productive capital’ from defined contribution schemes. We welcome the government’s current review of the pensions and retirement landscape, with increased focus on values and outcomes. Our LTAF supports the government’s focus, putting long-term pension money back into the real economy.”
Fidelity’s LTAF received regulatory approval from the UK’s Financial Conduct Authority in August and is set to launch in early 2025.
“We are committed to offering pension scheme members the best possible outcomes,” said Dan Smith, head of workplace investing, Fidelity International.
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“This continued focus on generating strong investment outcomes for members is supported by increasing diversification, combining opportunities across public and private markets.
“Incorporating Fidelity’s LTAF within FutureWise’s strategy will create new investment opportunities, broadening the range of assets that members are exposed to. We believe this will help to improve risk-adjusted returns and long-term outcomes for our members, within a robust and sustainable governance framework.
“FutureWise’s development from a lifestyle to a target date fund structure in recent years has resulted in considerable growth for the strategy and helped to enhance member outcomes.
“The integration of private assets as part of its strategy marks the latest stage of its evolution.”
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