Scottish Widows has announced plans to launch an open-architecture Long Term Asset Fund (LTAF) later this year, pending regulatory approval.

The open-architecture LTAF, sponsored by Scottish Widows and operated by an appointed full-scope Alternative Investment Fund Manager (AIFM), aims to offer greater control, flexibility, consistency of governance and valuation methodology.

Carne Group will serve as the AIFM to support the open-architecture structure, with Aberdeen Investments and BNP Paribas Asset Management selected as the initial growth and credit sub-funds managers, respectively.

The LTAF will offer new investment options to over four million workplace pension customers across the UK.

Scottish Widows CEO, Chira Barua, commented on the launch: “Private assets can be an attractive component of a modern portfolio structure for helping our customers achieve good outcomes in retirement. It’s also a brilliant win-win as it supports economic growth by funding companies with bespoke financing requirements.

“As one of the UK’s largest workplace pension providers and part of a group whose core purpose is helping Britain prosper, this is an important building block in our endeavour to offer the most distinctive pension proposition in the UK,” he said.

Scottish Widows chief investment officer, Kevin Doran, added: “Our open-architecture implementation approach gives us full control and future proofing on how and where we invest within our LTAF.

"The opportunity to source unique investment opportunities from across the Lloyds Banking Group estate only adds to the offering, meaning our policyholders can see their investments at work within their local communities," he continued.

“With full control of our own sponsored vehicle, we have the visibility of cash flows from members’ contributions to asset flows. This limits the need for precautionary liquidity, ensuring our members benefit from their investments in private assets.”

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