WTW is launching a private equity long term asset fund (LTAF), into which its master trust LifeSight will be a major investor.
LifeSight has confirmed that it will invest up to 5 per cent of its default equity fund into this new vehicle, in line with the Mansion House compact. This investment will be offered within LifeSight’s existing fee structure.
This new LTAF, which is expected to launch in the second half of this year, will be the first time WTW’s institutional private equity business has offered a pooled fund to the market.
This new fund, which still needs to secure regulatory approval, has initial commitments of over £450m ahead of launch. The fund will be called CG WTW Private Equity Access LTAF (PEAL) and will invest in range of private equity opportunities, including co-investment.
This launch supports wider industry initiatives, such as the Mansion House compact, a voluntary agreement where the government has sought pledges from large DC providers to boost investments into private markets and start-ups to to help support the UK economy.
WTW says these initiatives better align the long-term investment needs of many end investors, including DC pension savers, and invest into assets that, historically, have been harder for DC and private investors to access.
WTW adds that it believes 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 where longer-term illiquid DC asset strategies should start.
The CG WTW PEAL also includes mechanisms to ensure valuation alignment to the net asset value of the underlying assets and liquidity alignment to redemption timing. The 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.
As a structure, the LTAF is a new type of open-ended authorised fund, which the FCA introduced in 2021, designed to invest efficiently in long-term, illiquid assets. This can include a range of asset classes from venture capital and private equity to private debt, real estate and infrastructure.
Ben Leach, head of private market solutions in WTW’s Investments business, says this proposed launch is the culmination of three years of development work. “End savers looking to grow their wealth, will now be able to access dedicated private equity exposure through a regulated pooled fund structure, the first of its kind in the market.”
Lifesight UK head Jelena Croad adds: “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 proud to be able to offer this to members within our existing fee structure.”
CG WTW PEAL, is the first private capital evergreen, semi-liquid fund launched by WTW’s Private Markets Solutions Team. The team has plans for other long-term solutions to follow, focused on broadening its offering for savers across Europe and Asia-Pacific. I
In addition to DC pension savers, the PEAL will also be available to other institutional investors and individual professional investors.
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