The Financial Conduct Authority (FCA) has granted approval for the launch of Aegon Asset Management’s (AM) first Long-Term Asset Fund (LTAF).

Carne Group (CG) will be acting as the authorised corporate director (ACD) of the fund.

The CG Aegon AM Private Credit LTAF is aimed at the UK institutional and wealth markets, and is the first Aegon AM fund approved within the CG Aegon AM LTAF umbrella structure.

Aegon AM said the LTAF launch supported its long-term commitment to offering clients private credit strategies across a range of asset classes.

Drawing on the expertise of Aegon AM’s alternative fixed income team, the fund looks to provide diversified exposure to a range of Aegon AM’s private credit strategies, including corporate lending, fund financing, insured credit, renewables, and asset-backed finance.

Aegon AM said it believed these assets had the potential to generate higher returns compared to public markets, increase diversification, and contribute to financing companies and projects in various jurisdictions, including the UK.

Aegon AM head of institutional business, Jill Johnston, noted that private markets had received a great deal of attention in recent years, with a particular focus on new groups of investors such as DC pension schemes and the wealth management market.

“The LTAF offers investors access to illiquid assets in a regulated structure which might not have been possible in the past,” Johnston continued.

“The valuation, subscription and redemption processes provide additional protection for investors but also encourage long-term investment where daily liquidity is not necessary, such as for long-term pension savings.

“Private markets offer exposure to a wider and more diversified pool of return drivers than is possible with liquid asset classes alone.

“This includes smaller and private businesses, privately financed infrastructure projects, and private loans to emerging economies. Our focus on the higher quality, lower risk segments of the market means investors have the potential to earn an ongoing illiquidity premium during the growth, de-risking and decumulation phases of their pension life cycle.

“We are seeing increasing demand from a broad church of investors and with government and regulatory encouragement across the insurance, pension and local government markets we expect this to continue.”

CG product lead, Rich Willoughby, “As demand for private markets continues to intensify across both institutional and retail wealth audiences, the launch of Aegon AM’s LTAF represents an important milestone in the opening up of private credit opportunities to a broader investor base, including UK pension savers.

“We’re delighted that Carne continues to be the partner of choice for bringing innovative LTAF products to market. Carne’s relationship with Aegon exemplifies the benefits of industry collaboration in providing best-in-class fund management processes.”

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