Companions Group has gained approval from the Monetary Conduct Authority (FCA) to launch a personal credit-focused long-term asset fund (LTAF).
This would be the firm’s first LTAF, and the 25th LTAF to be dropped at market.
In keeping with filings on the FCA register, the LTAF authorisation was made efficient as of 27 January 2024.
Companions Group has additionally acquired clearance from the regulator to offer an umbrella for extra LTAF constructions that will likely be used for bespoke LTAF individually managed accounts (SMAs).
Learn extra: Companions Group boosts property division with three new hires
“Companions Group is among the first corporations to use for this and can leverage its experience in providing bespoke mandates,” an organization spokesperson advised Different Credit score Investor.
LTAFs are open ended funds which have been designed to offer simpler retail entry to long-term non-public markets investments reminiscent of non-public credit score.
The primary LTAF was launched by Schroders in March 2023, and since then one other two dozen LTAFs have both been launched or authorised within the UK.
Companions Group has beforehand tapped the retail investor market by means of the launch of a multi-private markets product in partnership with BlackRock final September.
As of April 2024, retail buyers have been ready to make use of their Modern Finance ISA (IFISA) allowance to put money into LTAFs, successfully shielding any returns from taxation.
Learn extra: Aviva Traders launches non-public debt LTAF
Nevertheless, some business consultants have warned that the fund construction remains to be too restricted to attraction to the mass retail market.
“The approval of the [Partners Group] LTAF exhibits the continuing curiosity in non-public credit score as an asset class,” stated Justin Partington, international head of fund and asset managers at investor providers group IQ-EQ.
“Nevertheless, for LTAFs to really take off with retail buyers, additional regulatory adjustments are wanted—significantly round entry and liquidity.
“Historical past has proven that putting illiquid property in constructions providing frequent withdrawals can result in issues. If the LTAF regime is to succeed for a variety of buyers, it should be sure that fund constructions and redemption limits and liquidity pool are aligned with investor expectations. In any other case, we threat making an attempt to suit a sq. peg right into a spherical gap as soon as once more.”
Learn extra: BBB and Phoenix make investments £500m into Schroders LTAF