Long Term Asst Funds (LTAFs)

Updated on December 2023

• LTAFs

The LTAF is the UK’s regime in place of the European Long-Term Investment Fund (ELTIF) regime for attracting investment into longer-term assets. The FCA has recently reformed the regime enabling wider retail distribution and even more recent announcements to enable ISA investment in LTAFs may make LTAFs more attractive to wealth managers. There has been an uptick in interest for the LTAF and its focus on investing in long-term illiquid assets. The table below sets out an outline summary but there are additional features, restrictions and requirements.

UK category of authorised fund Legal form:

• authorised contractualscheme (ACS) (either by a co- ownership scheme or an authorised limited partnership scheme);
•  authorised unit trust (AUT); 
• or -open-ended investment company (OEIC

• Open-ended. 
• Minimum redemption notice period of 90 days 
• Typical to have other disclosed liquidity tools

At least 50% of the value in relevant long-term illiquid assets including (directly or indirectly): 

• Private equity and other unlisted securities 
• Private credit 
• Venture capital 
• Infrastructure 
• Real estate 
• Forestry
•  Precious metals

• A “prudent spread of risk”

• The Financial Conduct Authority (FCA) Fund has to be authorised

• Borrowing is capped at 30% of the NAV

• LTAFs can be marketed within the UK subject to the FCA marketing rules 
• Cannot be sold into EEA states unless their private placement regime permits this

• A full scope alternative investment fund manager (AIFM) and a depositary

• UK Professional and sophisticated investors
•  May be marketed to retail investors subject to providing requisite risk warnings on liquidity

• No separate tax regime 
• Depends on form of the LTAF