Investing in Long-Term Asset Funds – what are LTAFs and how could investors benefit?

Explore how Long-Term Asset Funds (LTAFs) are opening up new investment opportunities beyond the stock market.
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Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

For a long time, private investments like private equity, private debt, infrastructure, and real estate, were mostly reserved for big players like pension funds and large institutions.

But in 2021 this changed when the UK’s financial regulator, the Financial Conduct Authority (FCA), introduced a new type of fund – the Long-Term Asset Fund (LTAF).

What are LTAFs?

LTAFs are designed to give more people, experienced individual investors, access to the more illiquid types of investments found within private markets.

They offer a way to invest in assets that aren’t listed on the stock market, which can help diversify a portfolio and access new areas of potential growth.

LTAFs allow more flexibility than some other private market funds where you can’t access your money for a set amount of time. But they are still less flexible than open-ended funds that deal daily.

You can invest or withdraw money at set times – usually once a month or once a quarter – making them more accessible than other ways to access private markets, while still matching the long-term nature of its underlying investments.

This article isn’t personal advice. If you’re not sure whether an investment is right for you, please seek advice. Long-Term Asset Funds are considered high-risk investments for experienced investors and should only form a small part of a diversified portfolio. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

What are the benefits of investing in LTAFs?

Access to new opportunities

LTAFs give you the chance to invest in private investments that were previously only available to large institutions. These could be sectors shaping our future, like renewables, fintech, biotech, and artificial intelligence.

Potential for higher returns and more diversification

LTAFs can help you access areas of high growth potential, spread your investments and lower your exposure to public markets up and downs.

Tax efficiency

LTAFs can already be held in Self-Invested Personal Pensions (SIPPs) and Innovative Finance ISAs.

However, from April 2026 investors will also be able to invest in LTAFs through a Stocks & Shares ISA. Tax rules can change and benefits depend on your circumstances.

Lower minimum investment thresholds

LTAFs generally have lower minimum investment amounts than many traditional private market funds, so they’re more accessible to individual investors.

What are the risks of investing in LTAFs?

All investments come with the risk of loss, and private markets investments typically have a higher risk of loss.

Liquidity risk

Private markets are less liquid than public markets, so you can’t buy or sell investments as quickly.

LTAFs manage this by letting you invest or withdraw usually only once a month or quarter, and you often need to give up to 90 days’ notice to take money out.

This helps fund managers plan ahead and avoid selling assets at a bad time.

So before investing, consider how easily you might need access to your money and whether this fits your financial goals.

Redemption caps

There are ‘liquidity management tools’ built in.

For example, if many investors want to withdraw large amounts at the same time, the fund can limit withdrawals to protect all investors.

This is sometimes called a ‘redemption cap’ – often set at 5% of the fund’s value.

If the total requested withdrawals is over 5%, all investors will be ‘scaled back’ and receive a proportion of the amount they’re looking to withdraw. Redemption limits, charges or refusals may be applied at the manager’s discretion if deemed in the interest of existing investors. Limits on new subscriptions/investors can also be applied.

Fund managers also keep some assets in cash or investments that are easier to sell to help pay withdrawals.

What are the main challenges of investing in LTAFs?

While LTAFs allow you to invest in private markets, they’re not right for everyone. If you think you might need quick access to your money, an LTAF might not be the best choice.

They’re better considered by experienced investors with a long-term view, who can accept that they don’t have daily access to their investment.

Private markets have different risks and ways of operating compared to traditional investments like shares or bonds.

They can also have more complex structures.

It’s important to do your research and make sure you’re comfortable with these features before investing.

However, for those wanting to spread investments beyond the stock market and access areas that were once only available to large institutions, LTAFs could be an option.

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Written by
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Blair Collins-Thomas
Communications Manager

Blair is a Communications Manager, writing about personal finance and the UK stock market. He comes from a private equity and asset management background writing for Investec, Amundi ETF, J.P Morgan, and BNP Paribas.

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Article history
Published: 8th September 2025