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Aegon putting pension savers into LTAFs

Journalist: Samantha Downes

ended 03. April 2025

Looking for the pros and cons - see release below:

  • All three Long-Term Asset Funds (LTAF’s) have now been approved by the Financial Conduct Authority (FCA), keeping Aegon UK on track to deliver private market investments as part of the overhaul of their largest workplace default fund, the £12 billion Universal Balanced Collection (UBC).
  • This significant development evidences Aegon UK’s commitment as a founding signatory of the 2023 Mansion House Compact.
  • The changes aim to improve risk-adjusted returns, enhance diversification and provide access to innovative investment opportunities, in areas that have historically been harder for workplace savers to access.

Aegon UK, a leading provider of retirement and investment solutions, has passed a major milestone following the FCA’s approval of the final two of the three LTAF’s which will provide exposure to private markets for the 700,000 savers in its largest default fund, the Universal Balanced Collection (UBC).

This development marks the successful culmination of a rigorous selection, design and regulatory process, reflecting Aegon UK’s determination to improve member outcomes and fulfil its obligations as one of the founding signatories of the 2023 Mansion House Compact. This paves the way to enhancing value and outcomes for members invested in UBC through new, innovative investment opportunities, which have previously been out of reach for most workplace pension members:

  • Since October 2024, BlackRock has managed a bespoke, diversified alternative private markets strategy for Aegon UK, including private equity, private debt, real estate and infrastructure.
  • From H2 2025, Aegon Asset Management’s private credit LTAF will provide diversified exposure to a range of AAM’s leading private credit strategies, including corporate lending, fund financing, insured credit, renewables and asset backed finance.
  • Also from H2 2025, J.P. Morgan Asset Management’s bespoke strategy, which leverages the firm’s alternatives platform, will offer exposure to private markets such as through private equity, infrastructure, transportation and forestry investments, completing the UBC’s trio of private market LTAF’s.

LTAF’s are a new type of regulated fund that invest in long-term, illiquid assets such as private equity, private credit, real estate or infrastructure.

Carne Group, Europe’s largest independent third-party management company, are acting as the Authorised Corporate Director (ACD) of the Aegon Asset Management and J.P. Morgan Asset Management LTAF’s.

Lorna Blyth, Managing Director of Investment Proposition at Aegon UK comments on the accomplishment, stating, “The success in receiving authorisation for all three LTAF’s marks real progress in offering our workplace pension members access to the best available asset classes, that are in line with our objective to provide better outcomes and value.

“This tangible action is in line with Government objectives and will allow members to share in the successes of growth companies, as well as the higher returns expected from other alternative investments. Our journey doesn’t end here – next up is our cornerstone investment into the British Growth Partnership, subject to regulatory approval, which will tap into the full commercial potential of world-class breakthrough technology companies based here in the UK.

“We are committed to maintaining our position as leaders in investment innovation, using our scale to

2 responses from the Newspage community

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Editor
Scott Gallacher
Director at Rowley Turton
While access to private markets is being hailed as progress, we shouldn’t pretend pension savers have been missing out on some secret sauce. Assets are assets—whether listed or private—and private doesn’t automatically mean better. If these investments are truly so attractive, why do managers constantly seek government support, tax incentives, or privileged pension access? Illiquidity is a major hidden risk, as we’ve seen with property funds, and pension savers in default funds may face issues if they need to switch or draw down in difficult markets. There’s a real concern this shift is being driven more by political goals and asset manager interests than by what's best for savers. Bigger and more complex doesn’t always mean better outcomes—especially if transparency and flexibility are lost along the way.
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Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
I'm not sure that making these types of funds part of a default solution for workplace savers is a good idea.

Not enough people engage with their pensions as it is. Each member is in charge of own investment strategy but many think it's done on their behalf. Exposing savers to something that they may not be able to get out of quickly, risks further damaging confidence in pensions.

It's a square peg in a round hole and we've seen similar issues with property funds in recent years. Valuation problems or too many people trying to sell have created huge delays. These types of investments are better suited to a structure like an Investment Trust.