11 November 2022
Long Term Assets Limited (“Long Term Assets” or “LTA”), a Guernsey investment company, today announces its intention to admit its shares to trading (“ITF”) on the Specialist Fund Segment of the Main Market of the London Stock Exchange. LTA will then launch a 12-month placing programme, aimed in particular at UK pension funds and other long-term savers.
Long Term Assets aims to generate income and capital growth over the long term by investing in a diversified, global portfolio of assets, consisting primarily of infrastructure, sustainable resources, private equity, real estate private debt and other private market investments.
Long Term Assets intends to launch on the Specialist Funds Segment of the London Stock Exchange. LTA aspires to be a “best-in-class” private assets vehicle, targeting a low 0.55% per annum management fee; typically a 7 to 8% p.a. hurdle rate of return (depending on the asset class) before performance fees kick in; a significant degree of inflation protection by allocating to inflation-correlated assets; and an ultra-long-term investment horizon. It has been designed to be particularly attractive to pension funds, and can provide them with a vehicle into which to inject their illiquid assets in exchange for publicly traded shares, subject to applicable legal and regulatory requirements.
LTA has a core focus on being compliant with and aligned to the Climate Group’s NetPositive operational principles, and Positive Impact investing is fundamental to LTA’s investment process, with initial assets expected to include:
- major renewable energy infrastructure investments (in the form of Atlantic SuperConnection);
- Swiss medical rehabilitation and hotel (Evolène Santé, Grand Hotel Kurhaus) and health destinations (Arolla),
- a leading UK fibre optic and telecoms installation, operation and maintenance firm (Telent);
- supply chain counterparty compliance (REG);
- sustainable forestry; and
- design and manufacture of cell and gene therapy viral vectors (ViroCell).
The portfolio of Positive Impact investments comprises disruptive companies, sustainable business models and high growth sectors that are central to the ‘new economy’. Disruptive Capital considers that downside resilience in the portfolio comes from Swiss real estate and the established market position of Telent.
The majority independent LTA board is chaired by Michelle McGregor-Smith, the former Chief Executive and Chief Investment Officer of the £27bn British Airways Pension Scheme.
Mrs McGregor-Smith commented:
“Across its strategies for post-Covid recovery, post-Brexit “levelling up” and Net Zero, vast investment sits at the heart of this Government’s vision for a British renaissance. 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 and businesses.”
LTA’s investment advisory team comprise world-class experts with decades of experience and success in private markets and in pensions, led by Edmund “Edi” Truell through Disruptive Capital GP Limited, the portfolio manager (“Disruptive Capital“). A long-term private assets investor, Edi, through the funds he has managed, has over 30 years invested in and built up a significant number of successful companies, including Pension Insurance Corporation, Getty Images, Imagine (now Future plc), Wickes and Paragon Healthcare.
The Alternative Investments Fund Manager proposed to be appointed, MJ Hudson, has years of experience managing private asset vehicles. Prof. Oliver Gottschalg is joining Disruptive Capital’s Strategic Advisory Committee. Oliver is renowned for his work at PERACS, part of MJ Hudson, analysing private fund managers’ performance.
The initial Long Term Assets portfolio is made up of a diversified range of assets, recently valued in the region of £160 million, comprising a complete selection of the Disruptive Capital’s family office private asset portfolio. Disruptive Capital has undertaken to give Long Term Assets priority access to its pipeline of future investment opportunities.
It is anticipated that LTA will scale rapidly through an ongoing placement programme, targeting pension funds and other longer-term investors. Disruptive Capital anticipates considerable market demand from investors hitherto constrained from investing in a diversified portfolio of private asset classes opting for a tailored, liquid, long-term vehicle including many pension funds.
Long Term Assets has the additional flexibility to accept a wide range of private markets assets as in specie subscriptions, in exchange for its publicly traded shares or shares which can be converted into publicly traded shares. This may be attractive to pension funds looking for solutions to improve the liquidity of their assets, following the recent turmoil in the LDI and gilts markets.
To the extent that such assets do not meet LTA’s demanding investment and ESG criteria, they can be held via realisation C shares.
As well as the advantages of good governance, transparency and shares that are transferable on the London Stock Exchange, Long Term Assets will have discount control mechanisms, including the power to buy in shares if they are trading below the prevailing Net Asset Value.
LTA considers that its admission to trading will support the UK government’s ambition to widen access to private markets and their associated benefits whilst also unlocking new investment to “build back better”.
Any shares in LTA will only be issued pursuant to a placing of such shares by LTA directly or through the placing agent and bookrunner, Shore Capital. There will be no initial public offer for the shares of LTA in any jurisdiction. Details of the proposed admission of LTA shares, together with any proposed issue of shares pursuant to any initial placing or under the placing programme will be set out in full in a prospectus that LTA expects to publish in due course.