The stock market rebound from the trauma of the Truss ‘mini’-Budget has convinced pension consolidator Edi Truell now is the time to revive the stalled investment company market with the launch of the Long Term Assets fund. 

Long Term Assets (LTA) will invest in an inflation-linked diversified global portfolio of private assets, including infrastructure, sustainable resources, private equity and debt, according to an intention to float statement on Friday.

It will be managed by Disruptive Capital, the Euronext Amsterdam-listed fund manager that is Truell’s family office, running the fortune he made from founding private equity group Duke Street Capital and the Pension Insurance Corporation.

Michelle McGregor-Smith, former chief executive and chief investment officer of the £27bn British Airways Pension Scheme, will chair LTA’s board. She said the company was poised to do its bit to help the government encourage long-term investment in the UK as part of its post-Covid recovery, ‘levelling up’ and net zero agendas. 

‘Long Term Assets stands at the ready to help address the shortfall in capital required to realise government’s ambition to pool billions into a new generation of world-leading British infrastructure businesses,’ she said.

The company will target an annual return of 7-8%, above which it will pay performance fees to Disruptive. The fund manager will also earn a base annual fee of 0.55% of assets.

LTA will start with a £160m seed portfolio whose assets include:

• Atlantic SuperConnection, building a hydroelectric and geothermal cable link between Iceland and the UK;
• Telent, the UK digital infrastructure provider; 
• ViroCell, the London-based manufacturer of gene-modified cells used in pharmaceutical trials;
• and a medical rehabilitation centre at Evolene Sante in Switzerland 

The specialist fund is not planning to hold a conventional initial public offer (IPO) but will roll out a series of share placings through broker Shore Capital over the next 12 months. 

Private investors will be eligible to apply for shares with the company talking to the Primary Bid platform about a possible retail offer.

‘As ever the paperwork gets in the way, but we have designed this for long-term savers, retail or institutional. Watch this space,’ Truell (above) told Citywire in an emailed comment.

However, Truell’s main fund-raising strategy is aimed at pension schemes that want exposure to private assets but, in light of the near collapse of some liability-driven investment (LDI) pension schemes, do not want to hold their illiquid investments directly.

LTA will allow pension schemes to swap their holdings in private assets into new shares in the company. 

The Bank of England’s intervention in the government bond market at the end of September was designed to bail out pension schemes whose LDI strategies ran aground when hard-to-sell gilts crashed in response to then chancellor Kwasi Kwarteng’s unaudited, tax-cutting ‘mini’-Budget.