What’s the Latest on Long-Term Asset Funds?

Key Takeaways

• Long-term asset funds offer access to illiquid private assets and are regulated by the Financial Conduct Authority.
• Investors can buy LTAFs through ISAs in April 2026.
• But platforms say limited interest from investors, advisors, and discretionary fund managers are holding back LTAFs.

While recent regulatory changes broadened LTAF access among retail investors, limited investment platform availability continues to slow adoption.

Morningstar recently hosted a roundtable with investment platform providers on “LTAFs and Expanding Platform Access”, in collaboration with The Platforms Association. But only a third of participants said they currently offer long-term asset funds or are actively working to onboard them in the next 12 months.

What Are the Obstacles to Broader LTAF Access?

In the recent roundtable discussion, UK investment platforms shared a few common reasons for not yet offering LTAFs:

• Limited interest from investors, advisors, and discretionary fund managers.
• Technology and infrastructure challenges.
• Resource constraints or other priorities.
• Regulatory concerns.

In general, private-market instrument adoption is lower among UK retail investors than in other developed markets. That stems from limited education, low interest, restricted access, and lower risk appetite. Standardizing risk and liquidity disclosures could help improve awareness and confidence.

For investment platform providers, long-term asset funds also add operational complexity.

LTAFs involve different notice periods, fee structures, redemption terms, and gating mechanisms. Onboarding typically takes three to six months, similar to other funds, with additional checks on liquidity controls, dealing cycles, and risk management. In our roundtable, several platforms noted that system testing is often the most time-consuming step.

What Is a Long-Term Asset Fund?

Long-term asset funds are hybrid fund structures that offer access to illiquid private assets. LTAFs are regulated by the Financial Conduct Authority.

Like European long-term investment funds, or ELTIFs, the UK’s long-term asset funds combine aspects of open- and closed-end funds. While the fund structure is flexible by design, LTAFs share common characteristics.

Private-Market Exposure

LTAFs must invest at least 50% of their assets in unlisted securities and other long-term assets. That can include private equity, venture capital, private credit, real estate, and infrastructure.

Liquidity and Redemption

Shares of long-term asset funds can only be redeemed at preset intervals, no more frequent than monthly. Subscriptions are variable, but typically monthly or quarterly.

Shareholders must give notice of intent to redeem shares at least 90 days in advance.

Manager Expertise

LTAFs must be managed by a designated alternative investment fund manager, regulated by the FCA.

How Can I Invest in LTAFs?

Investors can invest in LTAFs through:

• Defined contribution pension schemes. Investors can access LTAFs subject to exposure limits and appropriateness assessments. DC funds that committed to the Mansion House Accord have pledged to invest at least 10% of their main funds into private assets.
• Self-invested pension funds. LTAFs are currently investable as “non-standard assets” triggering additional capital adequacy requirements beyond “standard assets.”
• A fund and share account on certain investment platforms. Retail investors can access these funds if they work with a financial advisor and meet suitability requirements, or without a financial advisor if they receive a personalized risk warning.
• Stocks and shares individual savings accounts as of April 6, 2026.

What Are the Benefits of Investing in LTAFs?

As more companies stay private for longer, long-term asset funds can tap into additional potential streams of returns for long-term investors.

Some of the pros of investing in long-term asset funds include:

• Diversification: Long-term asset funds expand access to investment opportunities beyond publicly listed companies.
• Potential for higher returns: Private-market exposure could improve returns in the long run, although the illiquidity premium isn’t guaranteed or constant.

What Are the Risks of Investing in LTAFs?

Due to the complexity of the fund structure, advisors need to ensure that clients fully understand the risks and trade-offs before allocating money to LTAFS.

Some potential risks of in long-term asset funds include:

• Liquidity: LTAF shares can only be redeemed at preset intervals, with limits on how much can be redeemed at once. That makes them a better fit for investors with longer investment horizons over shorter ones.
• Fees: Semiliquid funds often come with higher fees, which can act as a drag on returns.
• Leverage: LTAFs may borrow up to 30% of their net asset value, consistent with the fund’s liquidity profile and redemption policies. Leverage can help semiliquid funds take advantage of investment opportunities but can also introduce borrowing risk.

Key Long-Term Asset Fund Providers

Regulators have approved more than 20 long-term asset funds in the United Kingdom.

Morningstar’s investment data covers the performance, fees, and redemption conditions of LTAFs. Some of the largest funds by assets under management include:

• Aviva Investors Real Estate Active LTAF seeks to provide a combination of income and growth through exposure to a diversified portfolio of real estate assets and land.
• Schroders (Future Growth Capital) UK Private Assets LTAF invests at least 85% of its NAV directly or indirectly in UK companies or real assets located in the United Kingdom.
• WS Fulcrum Diversified Private Markets LTAF aims to invest 80% in illiquid diversified private market assets and 20% in liquid assets.

Download the full report: Public/Private Convergence: Are Platforms Ready for LTAFs?