AREF/IPF annual update on Long-Term Asset Funds (LTAFs) | 24 February 2026 | 4.30pm – 6.30pm | Kindly hosted by PWC
The seminar was a panel discussion with:
• John Forbes, John Forbes Consulting LLP (moderator)
• Martin D. Dietz, Head of Diversified Strategies, Asset Management, Legal & General
• Lizzy Buss, Managing Director, Carne Group
• James Monk, Investment Director, Fidelity
• Tim Russell, Senior Fund Manager, Private Markets, Aviva Investors
This seminar was the second annual Association of Real Estate Funds (AREF) / Investment Property Forum (IPF) LTAF update. It was a bit of a reflection on what has happened since the previous update in February last year and what we can look forward to over the next and beyond. Although LTAFs are also starting to be used to raise money from wealth channels, the seminar this year focussed on their use with defined contribution (DC) pension schemes.
In the Mansion House Accord last May, many of the leading DC pension providers agreed that by 2030, ten percent of their workplace pension portfolios would be invested in assets that boost the economy, real estate, infrastructure and private equity, half of this to be in the UK. A controversial provision in Pensions Scheme Bill brings the threat of direct intervention by the government if this does not happen. We have also had new LTAFs being announced, most recently Apollo Global Management the week before last announcing regulatory approval to launch two LTAFs targeting private markets and credit, respectively.
The panel started with a general discussion of the flow of DC money into LTAFs. Most of this is currently group pension plans (GPPs) and master trusts, with a small amount of investment by individual employer trusts. This is generally a multi-asset approach, part of which is channelled via LTAFs.
This has an impact on how liquidity is managed at the LTAF through the subscription and redemption provisions operate. DC schemes still need to maintain daily pricing and liquidity at the scheme level, with the LTAF having subscriptions and redemptions no more frequently than monthly. It was noted that the actual liquidity required at the scheme level for individual members is small and can be provided outside the LTAF. There is nothing to prevent the LTAF quoting a price more frequently than monthly and one manager explained that their LTAF provided daily pricing.
The liquidity of the LTAF, through the frequency of trading, notice periods and the ability to defer redemptions needs to match the liquidity of the underlying investments. Because of the potential complexity of the underlying assets, thought has to be given in advance as to how these might be disposed of in practice. Stress testing is key – previous crises have shown that the demand for liquidity is likely to be at its highest when actual liquidity is at its most restricted.
The major master trusts and potentially in the future collective DC schemes are going to get bigger through consolidation.
The underlying investment approach also varies considerably from manager to manager, with investments in open-ended funds, closed-ended funds and direct assets. There are clearly many different ways to use the LTAF to channel DC money into private market investments.
This led into a discussion of the Mansion House Accord and the agreement by DC pension managers to invest in UK assets. Not all of the managers represented on the panel are signatories to the Accord, so there was an interesting debate on the pros and cons. The controversial mandation clause in the Pensions Scheme Bill to enforce this was also noted.
Another key regulatory development that was flagged is the introduction of the Value for Money framework. DC schemes have focussed for too long on minimising the cost of investing rather than looking at which routes provide the best value. This is now changing.
Prompted by a question from the audience regarding investment via wealth channels, it was noted that the type of LTAF used for wealth was usually different from that for DC, with the former typically in the form of an open-ended investment company and the latter typically in the form of an authorised contractual scheme. We had focussed on DC in this update as there had been a lot of activity in this over the last year, but there was a general view from both the panel and the audience that wealth LTAFs were going to be high on the agenda for the next year.
Each of the managers on the panel explained the underlying investment mix of their LTAFs. As the event was Chatham House rule, we are unable to report that part of the seminar in this write-up. Real estate as an asset class was felt to provide returns, diversification and indexation. Institutions are expected to increase their allocations to real estate.
Everyone agreed that this is very much the start of the journey and huge change can be anticipated over the next decade. Although some tweaks are needed to the LTAF regime, it has already established itself as the main conduit for DC investment in private assets.
This was a joint event with IPF:
Special thanks to PwC for hosting this event
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