The inclusion of long-term asset funds (LTAFs) in stocks and shares ISAs is unlikely to boost retail investment into private credit in the short term, stakeholders have said.
In July, the UK government announced it will allow the vehicles to be incorporated within stocks and shares ISAs from April 2026, to encourage British savers to put money into long-term private markets investments.
Despite the news being largely welcomed by the financial community, ISA providers seem to be taking a cautious approach.
AJ Bell D2C managing director Charlie Musson told Alternative Credit Investor: “We continue to monitor the development of LTAFs but have no plans to offer them at this stage.”
He noted that customers on the AJ Bell platform already have access to infrastructure, property and private equity assets through other well-established structures.
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Meanwhile, a report by Morningstar argues that technological constraints might form a major obstacle for attracting retail investors. Daniel Haydon, an analyst for equity strategies at the financial research firm, says that while LTAFs can already be held within innovative finance ISAs, they are very niche and have not seen much take-up.
“The market is still small and immature and for now there is limited platform availability”, added Evangelia Gkeka, senior analyst for fixed income strategies at Morningstar.
Morningstar estimates that the UK Financial Conduct Authority has so far approved £5bn of assets under LTAFs, with approximately £3bn of committed capital not yet been called.
