Key Takeaways
- • Schroders Capital has launched a Long-Term Asset Fund (LTAF) backed by Local Government Pension Schemes (LGPS), providing UK pension funds with diversified access to private equity, venture capital, real assets, and infrastructure investments.
- • Nearly 69% of UK defined contribution (DC) pension schemes plan to utilize LTAFs to access private markets, demonstrating significant institutional momentum for the structure almost three years after Schroders pioneered the first LTAF offering.
- • Schroders manages over £16.8 billion in assets across 54 local authority pension funds and seven LGPS pools as of June 2025, leveraging four decades of partnership experience with the sector.
- • In 2023, Schroders Greencoat closed the largest-ever commitment by UK local government pensions into locally-focused renewable infrastructure, targeting South-West England renewable energy investments aligned with net-zero objectives.
- • The initiative addresses a structural gap in UK venture capital funding by enabling domestic pension savers to participate in high-growth UK firms and venture capital returns, historically dominated by overseas institutional investors.
Summary
Local Government Pension Schemes have backed Schroders Capital's Long-Term Asset Fund (LTAF), marking a significant expansion of private market access for UK pension funds. The LTAF structure represents a pivotal development in enabling defined contribution (DC) pension savers to invest in illiquid assets—including private equity, venture capital, real assets, and infrastructure—while maintaining sufficient liquidity to meet pension redemption requirements.
Schroders' position as a trusted partner to the LGPS underscores the strategic importance of this backing. The asset manager currently administers over £16.8 billion across 54 local authority pension funds and seven LGPS pools as of June 2025, building on a 40-year relationship with the scheme. This long-standing partnership has provided Schroders with institutional knowledge of LGPS investment mandates, regulatory obligations, and fiduciary responsibilities specific to UK local government pension obligations.
The market response to LTAF structures has been substantial. Survey data indicates that 69% of UK DC schemes intend to utilize LTAFs, demonstrating rapid adoption nearly three years after Schroders launched the pioneering LTAF offering. This represents institutional recognition that private market access—traditionally restricted to larger defined benefit schemes and endowments—now represents a viable option for DC pension pools seeking enhanced diversification and longer-term return potential.
Schroders has previously demonstrated commitment to LGPS private asset strategies through the 2023 closure of the largest-ever UK local government pension commitment to locally-focused renewable infrastructure. This bespoke mandate targets renewable energy technologies across South-West England, aligning capital deployment with both net-zero policy objectives and LGPS sustainability mandates.
The broader context reflects structural underinvestment in UK venture capital and growth equity by domestic institutional investors. Historically, overseas venture capital funds have captured the majority of returns from scaling UK companies in technology and life sciences sectors. The LTAF initiative, supported by government policy frameworks including the Mansion House Compact, aims to unlock up to £75 billion in investment for high-growth UK companies while providing domestic pension savers access to venture capital returns previously unavailable through traditional DC scheme offerings.
Schroders' position as a trusted partner to the LGPS underscores the strategic importance of this backing. The asset manager currently administers over £16.8 billion across 54 local authority pension funds and seven LGPS pools as of June 2025, building on a 40-year relationship with the scheme. This long-standing partnership has provided Schroders with institutional knowledge of LGPS investment mandates, regulatory obligations, and fiduciary responsibilities specific to UK local government pension obligations.
The market response to LTAF structures has been substantial. Survey data indicates that 69% of UK DC schemes intend to utilize LTAFs, demonstrating rapid adoption nearly three years after Schroders launched the pioneering LTAF offering. This represents institutional recognition that private market access—traditionally restricted to larger defined benefit schemes and endowments—now represents a viable option for DC pension pools seeking enhanced diversification and longer-term return potential.
Schroders has previously demonstrated commitment to LGPS private asset strategies through the 2023 closure of the largest-ever UK local government pension commitment to locally-focused renewable infrastructure. This bespoke mandate targets renewable energy technologies across South-West England, aligning capital deployment with both net-zero policy objectives and LGPS sustainability mandates.
The broader context reflects structural underinvestment in UK venture capital and growth equity by domestic institutional investors. Historically, overseas venture capital funds have captured the majority of returns from scaling UK companies in technology and life sciences sectors. The LTAF initiative, supported by government policy frameworks including the Mansion House Compact, aims to unlock up to £75 billion in investment for high-growth UK companies while providing domestic pension savers access to venture capital returns previously unavailable through traditional DC scheme offerings.
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