WTW has announced plans to launch a private equity-focused Long-Term Asset Fund (LTAF), subject to approval from the Financial Conduct Authority (FCA), having already received commitments of over £450m in assets.

The proposed new fund, the CG WTW Private Equity Access LTAF (CG WTW PEAL), is expected to invest in a range of private equity opportunities including co-investments, via the new LTAF structure previously introduced by the FCA.

The fund received initial commitments of over £450m ahead of its launch, with LifeSight, WTW’s defined contribution (DC) pensions master trust, agreeing to allocate up to 5 per cent of its equity default fund into private equity, via CG WTW PEAL.

The new fund marks the first time WTW’s institutional private equity business has offered a pooled fund to the market, and is intended to support broader industry efforts to better align the long-term investment needs of many end investors, and invest into assets that, historically, have been harder for DC and private investors to access.

Indeed, announcing the launch, WTW argued that private equity investments, which historically have offered a high illiquidity premium, provide the greatest opportunity to maximise long-term returns from private markets and are therefore where all long-term illiquid DC asset strategies should start.

The fund also includes mechanisms designed to ensure valuation alignment to the net asset value of the underlying assets and liquidity alignment to redemption timing.

This process will include the use of a third-party valuer, adopting market best practise for investors into evergreen, semi-liquid funds investing into private markets.

In addition to DC pension savers, the PEAL will also be available to other institutional investors and individual professional investors.

The fund’s alternative investment fund manager, Carne Global Fund Managers (UK) Ltd, has submitted an application to the FCA for approval, which is anticipated in the second half of 2024.

Commenting on the news, WTW investments business head of private market solutions, Ben Leach, said: “The launch of PEAL is hugely exciting for investors and is the culmination of three years of development work.

"Crucially for end savers looking to grow their wealth, they will now be able to access dedicated private equity exposure through a regulated pooled fund structure, the first of its kind in the market.”

Adding to this, Lifesight UK head, Jelena Croad, stated: “LifeSight is committed to offering increasing value for members. Including private equity in the existing LifeSight default is expected to improve member outcomes and we are extremely proud to be able to offer this to members within our existing fee structure.”

Whilst the fund marks the first private capital evergreen, semi-liquid fund launched by WTW’s private markets solution team, the team confirmed that it has plans for other long-term solutions to follow, particularly across Europe and Asia-Pacific.

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

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