Fidelity International has announced plans to integrate private assets into its £16.9bn default investment strategy for UK workplace pension schemes, Futurewise, through its first long-term asset fund (LTAF).

Fidelity’s LTAF received Financial Conduct Authority (FCA) approval in August 2024, and the firm said the inclusion of the Fidelity Diversified Private Assets LTAF would provide members with “diversification benefits across multiple private asset classes, through a single building block offering specialist implementation”.

The fund will offer exposure to a range of assets including private equity, private credit, infrastructure, real estate and natural resources, as well as public assets for liquidity purposes.

Fidelity’s default investment strategy, FutureWise, will be the first investor in Fidelity’s Diversified Private Assets LTAF, with integration beginning in 2025 when the fund is launched.

The firm said it will gradually increase exposure to the LTAF over three years, working towards a target allocation of 15 per cent invested in the LTAF in the growth phase.

Fidelity International’s global head of platform solutions, Stuart Warner, said: “Incorporating private assets into our default strategy is a significant milestone for members as they save for retirement.

"The pensions adequacy gap is very real and will create significant retirement issues for individuals over the coming decades if we do not address and enhance overall member outcomes.

"For our DC members whose investment horizon is measured in decades not years, we believe there is strong alignment in the benefits of private market investments and member objectives.”

He added that the LTAF would support “the government’s focus, putting long-term pension money back into the real economy”.  

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