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BNP Paribas Asset Management (BNPP AM) today announced their selection by Scottish Widows as a long-term strategic and founding partner of Scottish Widows’ new UK domiciled, open-ended Long-Term Asset Fund (LTAF), that will offer Workplace Savers access to private markets. BNPP AM will manage a Diversified Private Credit Portfolio that will initially invest in a multi-currency, multi-asset portfolio incorporating infrastructure debt and Credit Risk assets, expanding into additional sleeves as the allocation grows, potentially including, but not limited to, commercial real estate debt, Dutch mortgages, direct corporate loans, ABS[1] and CLOs[2]. The Portfolio will be launched in H2 2025 subject to regulatory approval. ESG will be embedded within the investment proposition with care taken to align the portfolio to society’s net zero, environmental and energy transition aspirations.
BNPP AM offers a differentiated bespoke product by utilising its Pensions Solutions division to design and structure the solution, drawing on the broad capability of the BNP Paribas Group to offer enhanced ESG credentials, liquidity management, FX hedging, asset origination and relative value asset allocation. The governance of the new fund will be through a strategic partnership between Scottish Widows and BNPP AM to ensure the strategic asset allocation remains suitable and appropriate for members and that emerging opportunities are captured over time.
Roger Miners, CEO of BNP Paribas Asset Management UK said: “BNPP AM’s business philosophy is anchored towards a sustainable transition, values that we share with Scottish Widows. This partnership will ensure that Scottish Widows workplace savers will not just obtain exposure to private markets, but within that to emerging environmental and energy transition related transactions and technologies. This will allow savers to help finance a just transition and benefit from the returns that this can generate.”
Philip Dawes, Head of Distribution (UK & Ireland) at BNP Paribas Asset Management said: “We are excited to be given the opportunity to work with Scottish Widows to design and structure a solution that will offer members diversification, lower volatility, enhanced returns and ESG benefits. BNPP AM is aligned with Scottish Widows in wanting to democratise private markets to allow DC savers to benefit from the characteristics that they offer and have been focused on helping the UK market develop in an efficient and innovative way in this respect, for many years.”
Chira Barua, CEO of Scottish Widows and CEO Insurance, Pensions and Investments at Lloyds Banking Group said: “Private assets can be an attractive component of a modern portfolio structure for helping our customers achieve good outcomes in retirement. It’s also a brilliant win-win as it supports economic growth by providing funding to companies with bespoke financing requirements. As one of the UK’s largest workplace pension providers and part of a group whose core purpose is helping Britain prosper, this is an important building block in our endeavour to offer the most distinctive pension proposition in the UK.”
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