Fidelity International has received regulatory approval from the Financial Conduct Authority (FCA) to launch its Long-Term Asset Fund (LTAF), the Fidelity Diversified Private Assets LTAF.

The Fidelity Diversified Private Assets LTAF will aim to 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.

It will seek to provide diversified private assets exposure for investors in a ‘single building block’ and could serve as a complement to a traditional public assets portfolio.

The government has been pushing for defined contribution (DC) pension schemes to consider greater investment in long-term private assets, with the FCA finalising rules for LTAFs in late 2021.

Fidelity’s LTAF strategy is to focus on high-quality global private asset funds, while considering ESG sustainability risks in the investment process and implementing the firm’s exclusions list.

Fidelity stated that it had developed a solution for clients seeking greater access to private assets within an open-ended structure for DC schemes looking to enhance members’ retirement outcomes.

Furthermore, the Fidelity Diversified Private Assets LTAF will look to facilitate access to private assets using a “transparent and open architecture approach” to deliver value for clients.

Commenting on the announcement, Fidelity International global head of solutions and multi asset, Henk-Jan Rikkerink, said: “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.

“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.

“Our LTAF will aim to provide DC pension schemes with diversified exposure to private assets in a single, convenient vehicle.

“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.”

This article was originally published on our sister website, Pensions Age.

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