BlackRock has launched a new long-term asset fund (LTAF) aimed at broadening access to private markets for defined contribution (DC) pension schemes.

The BlackRock Diversified Alternative Strategies LTAF (DAS LTAF) is a co-mingled, open-architecture strategy designed to provide pension savers with access to a diversified range of private-market investments, including infrastructure, private equity, and real estate.

BlackRock said the fund is intended to complement public market exposures and enhance long-term retirement outcomes for DC savers.

The DAS LTAF has been seeded by two UK DC pension schemes, including the BlackRock UK Retirement Savings Plan, which has allocated 20 per cent of its assets to the strategy following advice from Mercer.

A second anchor investment has also been made by the UK pension scheme of another global financial services firm.

BlackRock said the launch reflects growing momentum in the UK workplace pensions market to incorporate long-term, less-liquid assets into DC default arrangements, while also supporting the government’s productive finance agenda.

BlackRock head of UK and Europe client business, Sarah Melvin, commented: “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 that Mercer had worked closely with the BlackRock UK Retirement Savings Plan to integrate the private markets allocation into the scheme’s default strategy.

“We see private markets as an important component in enhancing diversification and return potential, to support improved member outcomes in retirement,” Patel stated.

“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.”

BlackRock claimed it was among the first firms to launch LTAFs for UK DC schemes, with structures designed to meet the operational, liquidity, valuation and pricing requirements of DC pension arrangements.

The asset manager added that the DAS LTAF leverages BlackRock’s alternatives platform alongside its Aladdin and eFront technology systems to provide integrated risk oversight and portfolio transparency tailored to UK DC pension schemes.

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