In September 2021, the Working Group has published a report including recommendations that will create an environment in which defined contribution (DC) schemes and other investors can benefit from the appropriate long-term opportunities. These recommendations fall into four categories, requiring action from both industry and official sector:
- Shifting the focus to long-term value for DC pension scheme members
- Building scale in the DC market
- A new approach to liquidity management
- Widening access to less liquid assets
In response to the recommendations in the 2021 report, the Working Group has produced a suite of materials on the key considerations around investment in less liquid assets for trustees, employers, consultants and other key DC scheme decision makers. These materials, published in November 2022, include:
- A series of guides aiming to raise awareness of such key considerations around investing in less liquid assets as value for money, performance fees, liquidity management, fund structures, Long-Term Asset Fund (LTAF) legal guide, and due diligence.
- Within the same document, outputs by investment and employee-benefit consultants, including a joint commitment statement to shift the focus from cost to value, an accompanying list of key principles for consultants, and a call to action for DC investment platforms to evolve their processes and systems to support investment in less liquid assets.
- Additionally, the Group has also been producing model constitutional documents for the LTAF, to help streamline the legal process and to raise awareness of the key aspects of this new fund structure. The model documents can be found on the websites of some of the trade association members of the Working Group below.
These materials and further information could be found on the websites of the Working Group members, including Pensions and Lifetime Savings Association, Association of British Insurers, Association of Investment Companies, Alternative Investment Management Association, British Private Equity & Venture Capital Association, Investment Association, TheCityUK, as well as several individual member institutions.
A recording of the launch webinar is also available.
Media and other coverage can be found, for example, in Pensions Expert, Professional Pensions, Pensions Age, and in market participants’ blogs and articles (e.g., by LCP and Simmons & Simmons).