Schroders Capital launches climate-focused LTAF

Schroders Capital has announced the launch of a Long-Term Asset Fund (LTAF) designed to help UK pension scheme investors support the net-zero transition.

The fund, Climate+ LTAF, is a diversified multi-private assets solution and follows the recent news that Schroders has received regulatory approval to launch the UK’s first LTAF.

LTAFs are open-ended investment vehicles that are designed to allow a wider range of investors with long-term investment horizons to invest in illiquid and private assets more efficiently.

UK master trust Cushon has been announced as the Climate+ LTAF’s founding investor.

According to Schroders, the core impact of Climate+ is to positively contribute to climate change and support the transition to net-zero economies through its investments.

The strategy will aim to invest in four long-term themes: Climate mitigation, climate adaption, biodiversity/natural capital, and social vulnerabilities.

It will allocate to infrastructure, real estate, private equity, natural capital, and biodiversity-focused assets through a mixture of Schroders Capital and externally-managed funds.

Schroders Capital said that the strategy may obtain exposure to underlying assets through segregated accounts, as well as direct, secondary and co-investments.

Furthermore, it will operate a liquidity management framework with a focus on managing excess cash and investing in more liquid assets.

“Climate change is one of the most pressing issues of our time and private assets have a role to play in financing the just transition we must make,” commented Schroders Capital head of private asset solutions, David Seex.

“Pension savers want the opportunity to participate in tackling this generational change, as well as generate sustainable returns in their retirement pools.

“Climate+ provides a single access point to a diversified multi-private asset portfolio of investments which directly target the adaption to, and mitigation of, climate change.”

Cushon strategic adviser, Julias Pursaill, added: “This new strategy demonstrates the leading role pensions can play in supporting the move towards net zero and a more sustainable economy.

“We are delighted to be working with Schroders as a founding investor. Our research shows that members are far more engaged in their pensions if investments are aligned to their values and greater engagement leads to better outcomes in retirement.

“Pensions can be a force for good for both people and planet – this new strategy is a major leap forward for the industry.”

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