As Scottish Widows prepares to launch its groundbreaking Long Term Asset Fund (LTAF) later this year, subject to regulatory approval, Aberdeen Investments has been named the initial manager for the growth sub-fund. This marks a significant step towards democratizing access to private markets for over four million workplace pension customers across the UK.
Paving the Way for Private Market Accessibility
Scottish Widows’ upcoming LTAF is designed to unlock a new world of investment opportunities by providing access to the full universe of private market assets. This new vehicle will allow pension customers to invest in private markets, which have traditionally been reserved for institutional investors or high-net-worth individuals.
The move to launch the LTAF is part of a broader trend in the investment industry, where private assets are being integrated into more accessible formats for everyday investors. As the LTAF aims to democratize these markets, Aberdeen Investments sees the initiative as a vital development for the future of investment.
Aberdeen Investments, with its extensive expertise in managing private market assets, is poised to play a pivotal role in this transformation. By overseeing the growth sub-fund, Aberdeen will ensure that workplace pension customers benefit from the diversification advantages that private markets offer, which have become increasingly essential amid the volatility of traditional equity and bond markets.
The Vision Behind the LTAF
Xavier Meyer, CEO of Aberdeen Investments, spoke about the significance of the LTAF for both the broader investment landscape and individual investors. “The diversification benefits of private markets have come into sharp focus at a time of volatile equity and bond markets,” Meyer said. “Historically, these benefits have been limited to institutional investors and a handful of high-net-worth individuals. Scottish Widows’ LTAF is a meaningful step towards the democratisation of private assets.”
Meyer further emphasized that Aberdeen shares Scottish Widows’ ambition to provide millions of UK customers with access to these assets. “We are proud to be part of this initiative, and grateful for the trust that Scottish Widows has placed in our long-standing private market expertise,” he added.
Supporting Retirement Outcomes and Economic Growth
Chira Barua, CEO of Scottish Widows, highlighted the long-term benefits of private assets for retirement portfolios. “Private assets can be an attractive component of a modern portfolio structure for helping our customers achieve good outcomes in retirement,” Barua explained. She also noted the broader economic benefits of the LTAF, as it provides much-needed funding to companies with bespoke financing requirements. “It’s a brilliant win-win as it supports economic growth by providing funding to companies.”
The LTAF’s open-architecture approach is also a key feature of the fund. Kevin Doran, Chief Investment Officer of Scottish Widows, explained that this approach gives the pension provider “full control and future-proofing on how and where we invest within our LTAF.” This flexibility is crucial, particularly when sourcing unique investment opportunities from across the Lloyds Banking Group estate, a benefit that will allow policyholders to see their investments directly benefit local communities.
Aberdeen’s Expertise in Private Markets
Aberdeen Investments has long been a leader in managing private market assets, with £70 billion in assets under management (AUM) as of December 2024. Its solid track record in private markets, coupled with £1.1 billion in net flows for the 2024 fiscal year, demonstrates the firm’s ability to effectively manage and grow these types of investments.
By managing a range of investment vehicles, including investment trusts and semi-liquid funds like the Global Private Markets Fund, Aberdeen has enabled individual investors to tap into private market opportunities. This underscores the firm’s commitment to delivering innovative investment solutions across various client segments, from institutional investors to workplace pension customers.
As the LTAF evolves, Aberdeen’s experience will be crucial in ensuring the fund’s success. The collaboration with Scottish Widows aims to provide a diversified, long-term investment solution for pension holders, aligning with the broader goal of making private market assets more accessible to the general public.
