The launch comes as the UK’s Financial Conduct Authority (FCA), along with other regulators, wrestles with how to widen access to private market investments to a broader public without putting safeguards around suitability at risk.

Fidelity International has just received regulatory approval from the UK’s Financial Conduct Authority (FCA) to launch its first long-term asset fund (LTAF), the Fidelity Diversified Private Assets LTAF.

The fund will provide investors with access to a globally diversified range of public and private asset classes, in a single portfolio, providing exposure across private equity, private credit, infrastructure, real estate and natural resources. It focuses on high-quality private asset funds globally, whilst taking into account environment, social and governance sustainability risks in the investment process, and implementing Fidelity International’s exclusions list.

Fidelity said it has developed a solution for clients seeking greater access to private assets within an open-ended structure for defined contribution (DC) schemes aiming to enhance retirement outcomes for members.

Because alternative assets such as private equity are typically less liquid, regulators in the past have tended to restrict access to this form of investment to high net worth worth investors and institutions. However, as more firms stay private or delay listing on the market, there is a risk that the broad mass of investors could be shut out of key sources of returns. The LTAF structure is an attempt to resolve this issue.

“Today, a number of clients are already asking to include private assets in their solutions, and we only expect this to grow over the coming years,” Henk-Jan Rikkerink, global head of solutions and multi asset, Fidelity International, said. “In a world of challenged returns and reduced diversification from more traditional asset classes, clients are looking for a wider range of options to meet their long-term investment objectives.”   

“Our LTAF will aim to provide DC pension schemes with diversified exposure to private assets in a single, convenient vehicle. We believe that investing in private assets broadens the investment opportunity set and will improve the risk-adjusted returns and diversification characteristics of a portfolio over the long term,” Rikkerink continued.

Fidelity International offers investment solutions and services and retirement expertise to more than 2.9 million customers globally. Operating in more than 25 locations and with $862 billion in total assets, its clients range from central banks, sovereign wealth funds, large corporates, financial institutions, insurers, and wealth managers, to private individuals.