Fidelity International plans to integrate private assets into FutureWise, its £16.9bn default investment strategy for UK-based workplace pension schemes, the firm has said.
The investments will be made via Fidelity’s first Long-Term Asset Fund (LTAF), which received regulatory approval from the Financial Conduct Authority (FCA) in August.
The asset manager said the inclusion of the Fidelity Diversified Private Assets LTAF will provide members with diversification benefits across multiple private asset classes through a single product.
The fund aims to provide exposure across private equity, private credit, infrastructure, real estate and natural resources by accessing general partners (GPs) across these asset classes.
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It will also provide exposure to public assets for liquidity purposes.
FutureWise will become the first investor in Fidelity’s LTAF. The integration process will begin in 2025 as the fund launches.
The firm plans to gradually increase exposure to the LTAF over three years, until it reaches a target allocation of 15%.
Stuart Warner, global head of platform solutions, Fidelity International, said: “Fidelity International is a large pension provider in the UK with over 700,000 DC members. Incorporating private assets into our default strategy is a significant milestone for members as they save for retirement.
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“The pensions adequacy gap is very real and will create significant retirement issues for individuals over the coming decades if we do not address and enhance overall member outcomes.
“For our DC members whose investment horizon is measured in decades not years, we believe there is strong alignment in the benefits of private market investments and member objectives.
“Fidelity International is highly supportive of emerging efforts to unlock so-called ‘productive capital’ from defined contribution schemes,” Warner continued.
“We welcome the government’s current review of the pensions and retirement landscape, with increased focus on values and outcomes. Our LTAF supports the government’s focus, putting long-term pension money back into the real economy.”
