Investment Association to create 'long-term' fund structure

Steven Cameron, pensions director at Aegon, said the funds could serve a useful purpose for pension savers.

He said: "Within the pensions world, many savers in the accumulation phase have very long savings horizons and might benefit from sacrificing daily liquidity for the opportunity to increase their exposure to illiquid assets, albeit within a diversified portfolio. There are different considerations for those taking an income from their pension, where sufficient liquidity is clearly more important.

"As the IA says, such funds are less likely to be appropriate in the mainstream retail fund market, and are best suited for individuals who have taken advice. This does raise challenges around how to incorporate them into workplace defined contribution schemes, particularly in an auto-enrolment environment."

Chris Cummings, chief executive of the IA, said: “The IA’s proposals to help develop a new long-term asset fund will respond to changing customer needs and support the financing of companies and public projects.

"With the UK set to leave the EU over the next few months, these proposals will also help future proof the UK’s investment landscape, ensuring it can remain competitive on a global scale and allowing international investors to benefits from innovation in our country’s fund regime."

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