M&G Investments has received the regulatory green light for its Long-Term Asset Fund (LTAF), enabling it to offer a private credit strategy to UK defined contribution (DC) pension schemes.
The first fund that the asset manager plans to launch under the LTAF structure is the M&G Diversified Private Credit Feeder LTAF.
This is an evergreen fund that will invest in a diversified portfolio of private credit, structured credit and asset-backed debt.
Read more: M&G buys majority stake in private credit firm
M&G said that its LTAF will target the UK’s rapidly growing DC market, which is forecast to grow from £579bn to £1.39tn by 2033, citing Broadridge data.
It said the approval is a significant step in its ambition to grow its £73bn private markets business by widening investor access to its strategies.
LTAFs are a regulatory structure designed to make it easier to invest into long-term, illiquid assets including pivate credit.
Read more: M&G’s private credit ELTIF opens to wholesale clients across Europe
The LTAF comes after M&G launched its first European Long-Term Investment Fund in 2023 – the equivalent vehicle in the EU – which now manages €850m of corporate private credit assets.
“M&G is committed to the UK’s DC market where investment innovation and access to private markets strategies is an important area of focus,” said Emmanuel Deblanc, chief investment officer of private markets at M&G Investments.
“We are playing our part in this using the force of our long established private markets business and our experience of managing diversified private credit for UK pensions since 2012.
“This approval sets the stage for future growth of our private markets solutions for our DC pensions clients enabling them to efficiently and flexibly integrate private markets solutions to deliver resilient returns, improve diversification and ultimately, deliver better member outcomes.”
