M&G Investments has received regulatory approval to launch its first Long-Term Asset Fund (LTAF).

The firm is looking to target the defined contribution (DC) pension market, with the first fund within its LTAF umbrella structure being the M&G Diversified Private Credit Feeder LTAF.

The fund aims to provide DC schemes with access to a diversified portfolio of private credit, structured credit, and asset-backed debt.

M&G said the approval was a “significant step” in its ambition to grow its private markets business by widening access to its strategies.

LTAFs allow certain investors to invest in illiquid assets, seeking to generate higher returns and enhance portfolio diversification, alongside ‘unlocking’ productive finance.

M&G launched its first European Long-Term Investment Fund in 2023, a €850m strategy targeting opportunities in corporate private credit for investors, which is managed by the same team.

Commenting on the LTAF approval, M&G Investments chief investment officer of private markets, Emmanuel Deblanc, said: “M&G is committed to the UK’s DC market where investment innovation and access to private markets strategies is an important area of focus.

“We are playing our part in this using the force of our long-established private markets business and our experience of managing diversified private credit for UK pensions since 2012.

“This approval sets the stage for future growth of our private markets solutions for our DC pensions clients enabling them to efficiently and flexibly integrate private markets solutions to deliver resilient returns, improve diversification and ultimately, deliver better member outcomes.”

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