Chancellor Jeremy Hunt announced in his Autumn statement last week that the Long-Term Asset Fund (LTAF) can be held within an Innovative Finance ISA from April 2024.
Introduced in 2021, the LTAF is a new category of UK authorised open-ended fund that invests in long-term, less liquid and illiquid assets, such as private equity, venture capital, real estate, and infrastructure, while offering investors appropriate structural safeguards. The LTAF product structure can be an OEIC, unit trust, contractual scheme, property or charity authorised investment fund, or an umbrella fund with sub-funds or a feeder fund. Valuation frequency must be at least monthly.
The fund is important because it supports UK economic growth and the transition to a low carbon economy.
ZILO™ has seen strong LTAF demand coming from institutional investors. Allowing retail investors access to LTAFs through Innovative Finance ISAs is a positive move because it furthers the democratisation of investing.
While the LTAF provides opportunities for Asset Managers to grow distribution through this new authorised fund category, the LTAF product structure and its dealing and liquidity requirements might create support challenges for legacy technology systems.
ZILO™ is actively building LTAF capability into our Global Transfer Agency Platform and will provide clients a fully digital operating model in 2024.
If you are a Transfer Agent, Asset or Wealth Manager considering the LTAF and would like a discussion, then please contact Chris Northwood (CNorthwood@zilo.co.uk)