HSBC adds private markets to DC scheme [updated]

The LTAF is run by Fulcrum Asset Management and will invest across private markets asset classes, which the scheme said would give members access to a wider range of diversifying asset classes.

The WS Fulcrum Diversified Private Markets LTAF will invest across private equity, private credit, infrastructure and real estate, and has received regulatory approval from the Financial Conduct Authority.

The partnership with Fulcrum forms part of a wider plan from the scheme’s trustee board to target higher expected risk-adjusted investment returns for DC members.

Russell Picot, chair of the HSBC Bank (UK) Pension Scheme’s trustee board, said: “Improving expected member outcomes by targeting better risk adjusted returns through diversifying the assets in which members’ savings are invested have been at the heart of the HSBC scheme. I’m delighted for our scheme to take this step for our DC members and to drive positive change within the pensions industry.”

Consultancy group LCP advised on the allocation, and Laura Myers, partner and head of DC at the firm, said the partnership was “leading the way for single trust schemes with an innovative bespoke solution designed to enable members to benefit from investment in illiquid assets”.

She added: “The successful launch of the largest LTAF for a single trust scheme and incorporating it into the investment strategies demonstrates the dedication of the trustee and pension scheme executive team to driving innovation with the aim of improving member outcomes.”

Firms including Schroders and Aviva Investors have launched LTAFs since the structure was officially launched last year. LTAFs are also seen as an important aspect of chancellor Jeremy Hunt’s plans to encourage more pension schemes – particularly DC funds – to invest in UK assets.

This article was updated on 21 March 2024 with additional information about the new LTAF.