M&G launches LTAF for UK DC pension funds

M&G Investments has launched a Long-Term Asset Fund (LTAF), making the firm’s diversified private credit strategy available to UK defined contribution (DC) pensions schemes.

The approval is a significant step in M&G’s ambition to grow its £73bn private markets business by widening access to its strategies that have potential to enhance long-term returns and improve investment outcomes, the firm announced this morning.

The first fund under this LTAF umbrella structure is the M&G Diversified Private Credit Feeder LTAF, which provides access to a diversified portfolio of private credit, structured credit and asset backed debt delivering attractive income in an evergreen format, allowing it to operate indefinitely.

The fund will invest at least 90% of its assets into M&G Diversified Private Credit Fund which aims to deliver attractive risk-adjusted returns, with performance driven by its ability to identify and capitalise on private credit opportunities that offer favourable yields and strong credit fundamentals.

M&G launched its first European Long-Term Investment Fund (ELTIF) in 2023 – a €850m strategy targeting the best opportunities available in corporate private credit for investors, managed by the same team.

Emmanuel Deblanc, chief investment officer of private markets at M&G Investments, said: “M&G is committed to the UK’s DC market where investment innovation and access to private markets strategies is an important area of focus.

“We are playing our part in this using the force of our long-established private markets business and our experience of managing diversified private credit for UK pensions since 2012.”

Deblanc added that the approval sets the stage for future growth of M&G’s private markets solutions for DC pensions clients by enabling them to efficiently and flexibly integrate private markets solutions to deliver resilient returns, improve diversification and ultimately, deliver better member outcomes.

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