Approved long-term asset funds (LTAFs) have collectively hit £5m of assets under management (AUM), data from Morningstar shows, amid predictions that reforms by the UK government to include them in stocks and shares ISAs from 2026 could drive AUM growth.
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Based on numbers collected by Morningstar, there is also a total of around £3bn of committed capital that has not been called.
“The proposed reform to UK Stocks & Shares ISAs could serve as a catalyst for AUM growth in LTAFs via the retail channel, driving progress in platform availability,” said Evangelia Gheka, senior analyst for fixed income strategies at Morningstar.
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“While the LTAF market remains relatively immature, currently offering over 20 strategies in the UK, its potential for diversification and access to higher returns makes it an attractive proposition for investors. We expect continued growth in this space.”
LTAFs were introduced in the UK in 2021 to better enable access to long-term, illiquid private assets for defined contribution pension schemes and private wealth clients. They have been open to retail investors since 2023.
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Morningstar said the reforms should also lead to progress in terms of platform availability of LTAFs.
