Schroders Capital has received regulatory approval from the FCA to launch its second Long-Term Asset Fund, dedicated to renewable energy and the energy transition, the Schroders Greencoat LTAF.
Managed by the firm's £8.8bn renewable energy specialist Schroders Greencoat, the fund will invest in infrastructure assets for the UK defined contribution market, becoming the first LTAF to have an investment remit solely focused on renewable energy and transition-aligned infrastructure.
Schroders Capital unveils UK's first LTAF
The news follows the recent launch of Schroder Capital Climate+ LTAF, which was the first to receive approval by the FCA in March. LTAFs are a new category of fund designed to provide access to long-term private market assets.
With the upcoming launch of Schroders Greencoat LTAF, the firm will have two of the first three LTAFs authorised in the market, alongside Aviva Investors' £1.5bn Real Estate Active LTAF.
Richard Nourse, managing partner at Schroders Greencoat, said: "With the imminent launch of the Schroders Greencoat LTAF we look forward to being able to offer DC investors the opportunity to make attractive and impactful long-term investments into the energy transition."
Aviva Investors launches £1.5bn property LTAF
Duncan Hale, part of the private markets group at Schroders Greencoat, added: "For too long DC pension scheme members have had their noses pressed up against the glass, looking in at other types of investors enjoying the benefits that come from investing in illiquid assets.
"We are excited about the ability to offer access to renewable energy and energy transition related infrastructure assets to DC members widely, not only due to the attractive risk and return metrics they provide but also their ability to reflect members' sustainability requirements."
While these funds are currently only available to DC clients, an ongoing FCA consultation on broadening access to LTAFs may mean that these vehicles will also have a role to play in the UK wealth market in the future.
