Partners Group has won approval from the Financial Conduct Authority (FCA) to launch a private credit-focused long-term asset fund (LTAF).
This will be the company’s first LTAF, and the 25th LTAF to be brought to market.
According to filings on the FCA register, the LTAF authorisation was made effective as of 27 January 2024.
Partners Group has also received clearance from the regulator to provide an umbrella for additional LTAF structures that will be used for bespoke LTAF separately managed accounts (SMAs).
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“Partners Group is one of the first firms to apply for this and will leverage its expertise in offering bespoke mandates,” a company spokesperson told Alternative Credit Investor.
LTAFs are open ended funds which have been designed to provide easier retail access to long-term private markets investments such as private credit.
The first LTAF was launched by Schroders in March 2023, and since then another two dozen LTAFs have either been launched or approved in the UK.
Partners Group has previously tapped the retail investor market through the launch of a multi-private markets product in partnership with BlackRock last September.
As of April 2024, retail investors have been able to use their Innovative Finance ISA (IFISA) allowance to invest in LTAFs, effectively shielding any returns from taxation.
Read more: Aviva Investors launches private debt LTAF
However, some industry experts have warned that the fund structure is still too limited to appeal to the mass retail market.
“The approval of the [Partners Group] LTAF shows the ongoing interest in private credit as an asset class,” said Justin Partington, global head of fund and asset managers at investor services group IQ-EQ.
“However, for LTAFs to truly take off with retail investors, further regulatory changes are needed—particularly around access and liquidity.
“History has shown that placing illiquid assets in structures offering frequent withdrawals can lead to problems. If the LTAF regime is to succeed for a wide range of investors, it must ensure that fund structures and redemption limits and liquidity pool are aligned with investor expectations. Otherwise, we risk trying to fit a square peg into a round hole once again.”
