WTW has today announced its proposal to launch a private equity-focused Long Term Asset Fund (LTAF), subject to FCA approval.
The proposed new fund, named the CG WTW Private Equity Access LTAF will invest in a range of private equity opportunities including co-investments, doing so via the new LTAF structure recently introduced by the FCA.
LifeSight, WTW’s defined contribution (DC) pensions master trust with 360,000 individual members, has agreed to allocate up to 5% of its LifeSight Equity default fund into private equity, via WTW’s new Private Equity Access LTAF (‘CG WTW PEAL’) announced today.
The fund’s Alternative Investment Fund Manger (AIFM) Carne Global Fund Managers (UK) Ltd has submitted an application to the FCA for approval.
The fund has received initial commitments of over £450m ahead of launch.
The new private equity LTAF will be the first time WTW’s institutional private equity business has offered a pooled fund to the market. This supports broader industry initiatives to better align the long-term investment needs of many end investors, including DC pension savers, and invest into assets that, historically, have been harder for DC and private investors to access.
The LTAF, which is anticipated to be available later this year, will offer investors dedicated private equity exposure. WTW believes that private equity investments, which historically have offered a high illiquidity premium, provide the greatest opportunity to maximise long-term returns from private markets and are therefore where all long-term illiquid DC asset strategies should start.
The CG WTW PEAL also includes mechanisms to ensure valuation alignment to the net asset value of the underlying assets and liquidity alignment to redemption timing. The process will include the use of a third-party valuer, adopting market best practise for investors into evergreen, semi-liquid funds investing into private markets.
As a structure, the LTAF is a new type of open-ended authorised fund, which the FCA introduced in 2021, designed to invest efficiently in long-term, illiquid assets. This can include a range of asset classes from venture capital and private equity to private debt, real estate and infrastructure.
Ben Leach, Head of Private Market Solutions in WTW’s Investments business, said: “The launch of PEAL is hugely exciting for investors and is the culmination of three years of development work. Crucially for end savers looking to grow their wealth, they will now be able to access dedicated private equity exposure through a regulated pooled fund structure, the first of its kind in the market.”
Jelena Croad, head of LifeSight UK, said: “LifeSight is committed to offering increasing value for members. Including private equity in the existing LifeSight default is expected to improve member outcomes and we are extremely proud to be able to offer this to members within our existing fee structure.”
Simon Ellis, Chair of Trustees for LifeSight comments; “The LifeSight Trustee puts members at the heart of everything we do. The Trustee has completed a lengthy and thorough governance process to ensure the suitability of the fund and its alignment with the Trustee’s commitment to member outcomes.”
CG WTW PEAL, is the first private capital evergreen, semi-liquid fund launched by WTW’s Private Markets Solutions Team.
The team has plans for other long-term solutions to follow, focused on broadening its offering for savers across Europe and Asia-Pacific.
In addition to DC pension savers, the PEAL will also be available to other institutional investors and individual professional investors.
The CG WTW PEAL fund is subject to regulatory approval, which is anticipated in the second half of 2024.
