Aegon UK has added three long-term asset funds to its largest workplace pension default fund, the Universal Balanced Collection.

The addition of the funds will provide potential exposure to private markets for around 700,000 members in its £12bn workplace default fund, according to the pension and investment provider.

LTAFs are a new form of regulated fund that invest in long-term illiquid assets, such as private equity, private credit, real estate or infrastructure. They are designed to encourage long-term investment in sectors seen as relatively illiquid but which benefit the UK economy. Their structure was designed for the UK defined benefit, defined contribution and UK charities market.

The first UK LTAF was launched in April 2023.

Aegon first began developing the funds having signed the 2023 Mansion House Compact, of which it was one of the founding signatories.

The final two of the three LTAFs have now received FCA approval and all three will have been added to Aegon UK’s largest workplace pension default fund by the second half of this year.

Lorna Blyth, managing director of investment proposition at Aegon UK, said the three new LTAFs will offer better outcomes and value to their workplace default members.

She said: “The success in receiving authorisation for all three LTAF’s marks real progress in offering our workplace pension members access to the best available asset classes, that are in line with our objective to provide better outcomes and value.

“This tangible action is in line with Government objectives and will allow members to share in the successes of growth companies, as well as the higher returns expected from other alternative investments.”

Blackrock has managed the diversified alternative private markets strategy for Aegon UK since October 2024. It includes private equity, private debt, real estate and infrastructure.

Aegon Asset Management’s private credit LTAD will provide diversified exposure to a range of private credit strategies from the second half of this year. It includes corporate lending, fund financing, insured credit, renewables and asset backed finance.

JP Morgan Asset Management have built a bespoke alternatives LTAF which will also be available form the second half of this year. It offers exposure to private markets through private equity, infrastructure, transportation and forestry investments.

The Aegon Asset Management and JP Morgan Asset Management LTAFs will have third party management company Carne Group acting as their authorised corporate director.

Aegon said it also has plans to add a fourth LTAF focusing on British technology companies.

Aegon UK offers pension and investment solutions to over 4m customers in the UK and is part of the Aegon Group.