- FutureWise, Fidelity International’s £16.9bn default investment strategy for UK-based pension schemes, will integrate private assets via a Long-Term Asset Fund (LTAF) structure
- FutureWise will become the first investor in Fidelity’s Diversified Private Assets LTAF, which received regulatory authorisation in August
- The move will provide a new set of investment opportunities, aiming to enhance diversification, improve risk-adjusted returns and improve the overall member outcome
‘Fidelity’ today announces plans to integrate private assets into its £16.9bn* default investment strategy (FutureWise) for UK-based workplace pension schemes, via Fidelity’s first Long-Term Asset Fund (LTAF), which received regulatory approval from the UK’s Financial Conduct Authority in August.
The inclusion of the Fidelity Diversified Private Assets LTAF will provide members with diversification benefits across multiple private asset classes, through a single building block offering specialist implementation. The Fund aims to provide globally diversified private markets exposure across private equity, private credit, infrastructure, real estate and natural resources by accessing some of the best General Partners (GPs) across these asset classes selected by Fidelity’s experienced investment team. It will also provide exposure to public assets for liquidity purposes.
FutureWise, Fidelity International’s £16.9bn default investment strategy for UK-based workplace pension schemes will become the first investor in Fidelity’s Diversified Private Assets LTAF. The integration process will begin in 2025 as the Fund launches, with plans to increase exposure gradually to the LTAF over three years, until reaching a target allocation of 15% invested in the LTAF in the growth phase.
Stuart Warner, Global Head of Platform Solutions, Fidelity International, said: “Fidelity International is a large pension provider in the UK with over 700,000 DC members. Incorporating private assets into our default strategy is a significant milestone for members as they save for retirement. The pensions adequacy gap is very real and will create significant retirement issues for individuals over the coming decades if we do not address and enhance overall member outcomes. For our DC members whose investment horizon is measured in decades not years, we believe there is strong alignment in the benefits of private market investments and member objectives.
“Fidelity International is highly supportive of emerging efforts to unlock so-called ‘productive capital’ from defined contribution schemes. We welcome the government’s current review of the pensions and retirement landscape, with increased focus on values and outcomes. Our LTAF supports the government’s focus, putting long-term pension money back into the real economy.”
Dan Smith, Head of Workplace Investing, Fidelity International, commented: “We are committed to offering pension scheme members the best possible outcomes. This continued focus on generating strong investment outcomes for members is supported by increasing diversification, combining opportunities across public and private markets.
“Incorporating Fidelity’s LTAF within FutureWise’s strategy will create new investment opportunities, broadening the range of assets that members are exposed to. We believe this will help to improve risk-adjusted returns and long-term outcomes for our members, within a robust and sustainable governance framework.
“FutureWise’s development from a Lifestyle to a Target Date Fund structure in recent years has resulted in considerable growth for the strategy and helped to enhance member outcomes. The integration of private assets as part of its strategy marks the latest stage of its evolution.”
Source