UK financial services group Hargreaves Lansdown is teaming up with Schroders Capital to offer UK retail investors access to private markets through two long-term asset funds from next week.
For the first time, new alternative asset funds will be available through so-called self-invested personal pensions (SIPPs), which provide tax relief on contributions and are exempt from capital gains and taxes on dividends.
The LTAFs will be available starting Sept. 15, with a minimum investment of £10,000.
UK regulators launched LTAFs in 2021 to broaden retail investor access to private market vehicles traditionally reserved for institutional investors.
Unlike traditional closed-end private market funds that can keep capital locked up for a decade or more, LTAFs provide periodic liquidity, with monthly or quarterly redemptions. The aim is to balance accessibility with the long-term investment horizons needed for illiquid assets.
The Hargreaves Lansdown and Schroders tie-up is the latest move by asset managers aimed at attracting retail investors to alternative investments.
UK lawmakers have taken steps to aid this push. In May, for example, a new government plan was introduced to boost pension funds’ alternative allocations to 10% of assets, or £50 billion (about $66 billion). In June, the UK government published a Pension Schemes Bill to channel defined-contribution pension capital into private markets by empowering regulators to enforce the Mansion House Accord’s 10% target.
Most recently, UK finance minister Rachel Reeves unveiled reforms that include opening up LTAFs to stocks and shares individual savings accounts (ISAs). Also, from April next year, the UK finance regulator, the Financial Conduct Authority, will permit banks to advise customers with idle cash to invest in private market vehicles.
Featured image by Shomos Uddin/Getty Images
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