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AJ Bell, one of the UK’s largest retail investment sites, has ruled out selling private assets via new semi-liquid funds, claiming that demand has been insufficient.
Long-term asset funds (LTAFs) are designed to broaden the exposure of private assets to UK retail investors.
But while DIY investment group Hargreaves Lansdown has partnered with Schroders Capital to offer LTAFs to its clients since September, retail investors will not be able to buy them through AJ Bell.
“[Our customers] already have access to a wide range of funds and trusts offering exposure to infrastructure, property and private equity assets through well-established structures,” said Charlie Musson of AJ Bell. “We have no plans to offer [LTAFs] at this stage.”
LTAFs are a relatively new type of open-ended fund structure. While investments can be made monthly, the funds typically require a notice period of at least 90 days for withdrawals, meaning investors cannot count on access to their money whenever they want.
Fund managers for LTAFs keep a portion of the fund in cash or easier-to-sell investments to help cover withdrawals.
Some investment platforms and wealth managers have been keen to offer them to clients. “Since our launch in September, we have already seen strong demand [for LTAFs],” said Emma Wall, chief investment strategist at Hargreaves Lansdown.
“Private market vehicles such as LTAFs are by their nature never going to be suitable for all investors, but we have seen that among more sophisticated investors for whom these products are appropriate, there is clear interest.”
In 2023, the Financial Conduct Authority authorised the sale of LTAFs. Private assets had been seen as traditionally the preserve of institutions and very wealthy individuals. The FCA sought to encourage retail investors to support UK infrastructure and private companies with a lower investment outlay of as little as £10,000 per product.
Some UK wealth managers have chosen not to offer LTAFs. Quilter does not sell them and does not “have plans in place to do so” but added that it was monitoring developments.
“Currently there is not enough [demand] for us to consider the operational requirements to start offering them,” the wealth manager said.
Yet these products have attracted some capital. LTAFs grew by 46 per cent to about £7bn between December 2024 and June, according to data from Amundi.
“We have seen strong client demand for LTAFs and our partnership with Hargreaves Lansdown has further supported this evolution,” said James Lowe, director of private markets at Schroders Capital. “A growing number of platforms are already developing technology to support evergreen private markets funds.”
Large alternative asset managers, such as Apollo and CVC, which have traditionally relied mostly on institutions such as pension funds and endowments, in recent years have targeted wealthy individuals for capital in Europe. Both expect to target retail investors over time.
Retail investors can also get access to private assets via listed UK investment trusts, which are available on most trading platforms.