M&G Investments today announces it has received regulatory approval for a Long-Term Asset Fund (LTAF), making a flagship diversified private credit strategy available to UK Defined Contribution (DC) pension schemes for the first time.
The firm writes that the approval is a significant step in M&G’s ambition to grow its GBP73 billion market-leading private markets business by widening access to its strategies that have the potential to enhance long term returns and improve investment outcomes.
Targeting the UK’s rapidly growing DC market, which is forecast to grow from GBP579 billion to GBP1.39 trillion by 2033, the first fund within this LTAF umbrella structure is the M&G Diversified Private Credit Feeder LTAF – which provides access to a diversified portfolio of private credit, structured credit and asset backed debt delivering attractive income in an evergreen format, allowing it to operate indefinitely. M&G writes that it has decades of experience investing in fixed income across both public and private markets, with investment teams working alongside specialist in-house analysts and structuring experts.
The firm writes that LTAFs enable certain UK investors, who were previously unable to access traditional private market fund structures, to invest in illiquid assets like private equity, credit, infrastructure and real estate. Compared to the public markets, such assets have the potential to generate higher returns and enhance portfolio diversification, whilst playing a crucial role in unlocking productive finance and supporting economic development. M&G launched its first European Long-Term Investment Fund in 2023 – a EUR850 million strategy targeting the best opportunities available in corporate private credit for investors which is managed by the same team.
Emmanuel Deblanc, Chief Investment Officer of Private Markets at M&G Investments, says: “M&G is committed to the UK’s DC market where investment innovation and access to private markets strategies is an important area of focus. We are playing our part in this using the force of our long-established private markets business and our experience of managing diversified private credit for UK pensions since 2012.
“This approval sets the stage for future growth of our private markets solutions for our DC pensions clients enabling them to efficiently and flexibly integrate private markets solutions to deliver resilient returns, improve diversification and ultimately, deliver better member outcomes.”
