Mercer has announced plans for its UK workplace savings solutions, including its master trusts, to invest in a bespoke long-term asset fund (LTAF) focused on private markets, with an initial commitment of £350m.

The investment will be made into the Schroders Mercer Private Assets Growth LTAF, which is expected to go live in the first quarter of 2026, subject to regulatory approval from the Financial Conduct Authority (FCA).

Mercer said the move is designed to increase pension scheme members’ access to private market investments.

In its first year, the LTAF is expected to receive an initial £350m commitment from Mercer UK’s master trusts, with further allocations anticipated over time.

The fund will be launched by Schroders Capital under its LTAF umbrella, with Future Growth Capital Limited acting as the delegated investment manager.

Mercer representatives will also sit on a joint investor advisory committee to support ongoing governance.

Initially, the fund will sit within the growth portfolios of the master trusts and will focus its illiquid investments on private equity and infrastructure equity.

Mercer claimed these asset classes are viewed by the trustee boards as best placed to deliver strong long-term returns, improve diversification and support better retirement outcomes for members.

The LTAF will also hold listed equities to meet liquidity requirements and is expected to allocate a meaningful proportion of capital to UK-based growth opportunities.

Indeed, it will become the primary vehicle for private market allocations across Mercer UK’s workplace savings arrangements, including the Mercer master trust and the now:pensions master trust.

It aligns with the trustee boards’ ambition to allocate at least 10 per cent of default fund assets to private markets by 2030, with a minimum of 5 per cent invested in the UK, in line with their commitments as signatories to the Mansion House Accord.

Mercer UK wealth practice leader, Phil Parkinson, said the scale of the combined Mercer and now:pensions assets, alongside Mercer’s global private markets expertise, would allow the master trusts to make larger and more effective allocations to private market assets with the potential for higher returns.

He added that private markets have increasingly become a core part of institutional portfolios, offering diversification and innovation, suggesting that the LTAF was designed to "provide access to growth-oriented private equity and infrastructure assets to enhance long-term returns for savers."

City of London Corporation Lady Mayor, Dame Susan Langley, added that the commitment demonstrated "tangible progress" in delivering the ambitions of the Mansion House Accord.

She argued that a long-term investment of this scale, focused on growth, could support stronger returns for pension savers while reinforcing the UK’s position as a leading global investment market.

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