Private markets are seen as an important component in enhancing diversification and return potential
BlackRock has launched a diversified alternative strategies long-term asset fund (LTAF) in a bid to provide defined contribution (DC) savers with access to a broader range of private market investments.
The asset manager said the launch of the Diversified Alternative Strategies LTAF comes in a move to enhance long-term retirement outcomes by complementing public market exposures with assets such as infrastructure, private equity and real estate – something it said reflected continued momentum across UK workplace pensions to incorporate long-term, less liquid assets into DC default schemes.
It said the new fund had been seeded by two anchor investments – the BlackRock UK Retirement Savings Plan (advised by Mercer) and the UK pension scheme of another global financial services firm.
BlackRock head of UK and Europe client business Sarah Melvin said: "Retirement is at the core of what we do at BlackRock. We're delighted to support pension schemes in providing their members access to a broad range of private markets to drive better retirement outcomes.
"Our strong belief is that private markets can improve long-term outcomes for DC savers when accessed in the right way, which is why we have also introduced the LTAF into BlackRock's own UK staff pension scheme."
Mercer DC director Tej Patel added: "We have worked closely with BlackRock's UK Retirement Savings Plan to integrate a 20% allocation to private markets within the default strategy.
"We see private markets as an important component in enhancing diversification and return potential, with the aim of supporting improved member outcomes in retirement. BlackRock's Diversified Alternative Strategies LTAF reflects a number of key principles and features that we expect to deliver value for members over the long term."
