The Long-Term Asset Fund — FCA Handbook COLL 15
The LTAF is the UK's open-ended fund built to hold illiquid long-term assets — private equity, private credit, infrastructure, real estate — by matching how quickly investors can redeem to how quickly those assets can actually be sold. It is the UK's post-Brexit answer to the EU's ELTIF, and PS23/7 opened it beyond professionals to appropriateness-gated retail investors and DC pension money. The bargain is simple: you get an open-ended wrapper around genuinely illiquid assets, but only because the redemption door is deliberately slow — a minimum 90-day notice period and dealing no more than monthly.
Scope and the core mechanism
The core mechanism is liquidity matching. A daily-dealing open-ended fund holding illiquid assets is a run risk — the assets cannot be sold fast enough to fund redemptions in a stress. The LTAF resolves this by making the fund's redemption terms track the real sale-speed of its portfolio. Under COLL 15.8 the redemption notice period must be at least 90 days (COLL 15.8.12R) and the manager must not make redemption determinations more than once a month (COLL 15.8.12R / 15.8.2R). Longer notice and less frequent dealing are permitted — and expected — where the assets are slower to sell. The fund is an authorised AIF (a fund the FCA has authorised, run under the UK AIFM regime — the UK's onshored version of the manager-authorisation rules that were the AIFMD). It is not an ELTIF and carries no EU passport; it is a purely domestic wrapper. On distribution, PS23/7 reclassified LTAF units from a Non-Mass Market Investment to a Restricted Mass Market Investment (RMMI) — meaning it can now reach ordinary retail investors, but only through the RMMI perimeter of risk warnings, appropriateness checks and marketing restrictions, alongside professional/sophisticated investors, self-select DC pension schemes and SIPPs.
Key provisions
| Provision | What it says | The practical point |
|---|---|---|
| Eligible assets | Designed to invest predominantly in long-term, illiquid assets — private equity, private credit, infrastructure, real estate and other assets not readily realisable (COLL 15). | This is a wrapper for the assets that a UCITS or NURS could never hold at scale. If your strategy is mostly liquid, the LTAF is the wrong tool. |
| Redemption / liquidity model | Notice period ≥ 90 days; redemption determinations no more than monthly; a valuation point on every dealing day and at least monthly (COLL 15.8.12R, 15.8.2R). | "Open-ended" here does not mean liquid. Redemptions are slow by design and the notice period should stretch to match slower assets — model your cash-flow and investor comms around it. |
| Distribution perimeter | After PS23/7, units are an RMMI: reachable by mass-market retail (subject to appropriateness + risk warnings), plus professional/sophisticated/high-net-worth investors, self-select DC schemes and SIPPs (PS23/7). | Retail access is real but gated. Distributors carry the appropriateness and financial-promotion burden — that is where mis-selling exposure sits. |
| Authorised fund manager | Must have a full-scope UK AIFM (or equivalent) permission to manage an LTAF; the AFM runs the fund under the UK AIFM regime (PS21/14). | Not a wrapper any manager can launch — you need the right permissions before you start, so scope the authorisation early. |
| Depositary | Requires an independent depositary responsible for safekeeping/oversight, as for other authorised funds (COLL 15). | Standard authorised-fund governance — budget for the depositary relationship and its oversight of the illiquid holdings. |
| Disclosure & risk warnings | Prospectus and RMMI-mandated risk warnings must make the illiquidity, notice periods and valuation uncertainty plain (PS23/7). | The paperwork is the conduct defence. If the disclosures under-state the lock-up, that is the file the FCA reads back to you. |
Amendment history
| Date | Instrument | What changed |
|---|---|---|
| Oct/Nov 2021 | PS21/14 | Final LTAF rules published; COLL 15 created, establishing the regime, the 90-day-plus notice model and an initial professional/sophisticated-investor distribution perimeter. (Exact publication date — see To verify.) |
| 2023 | — | First LTAFs authorised and launched under the regime. (Exact first-authorisation date — see To verify.) |
| 29 June 2023 | PS23/7 | Broadened access: LTAF units recategorised from Non-Mass Market to Restricted Mass Market Investment, extending distribution to appropriateness-gated retail, self-select DC pension schemes and SIPPs. |
What it works with
The LTAF is the UK's home-grown counterpart to the EU's ELTIF 2.0 — both wrap illiquid long-term assets in a fund retail can (partly) reach, but they are separate regimes: an ELTIF passports across the EU, an LTAF does not, and the redemption mechanics differ, so read them as parallel options for the same investor need rather than interchangeable. It also sits inside the manager-authorisation world contrasted on the AIFMD page: the LTAF's manager runs under the UK AIFM regime — the onshored rules the UK kept after leaving the AIFMD passport at Brexit — so a UK LTAF has no automatic EU marketing right. When you are choosing where to house an illiquid strategy, weigh it against the alternatives in the domicile comparison: the LTAF buys you UK-authorised status and (gated) retail/DC access at the cost of the 90-day-plus liquidity discipline and no EU passport.
The gotcha: "open-ended" LTAF does not mean daily — or even quick — liquidity. The 90-day minimum notice and monthly-at-most dealing are hard rules, and for slower assets they should be longer. The headline conduct risk is a distributor selling the retail-accessible LTAF as if it were a liquid fund; the appropriateness gates and risk warnings that PS23/7 attached are precisely the tripwire that catches that, and they sit on the distributor, not just the manager.
To verify
- Exact PS21/14 publication date — confirm the precise day COLL 15 was made (widely cited as October/November 2021) against the PS21/14 landing page / the PDF.
- First LTAF authorisation / launch date in 2023 — confirm the exact date the first LTAF was authorised, rather than "2023".
- Notice-period floor vs. per-fund calibration — 90 days is the minimum under COLL 15.8.12R; confirm from COLL 15.8 how the FCA expects the AFM to set a longer period to match slower assets.
- Precise PS23/7 retail categories and appropriateness mechanics — confirm the exact RMMI perimeter (mass-market retail conditions, self-select DC, SIPP) and any FSCS-coverage outcome from the PS23/7 final rules.
Changelog
- 2026-07-07 — page created (regulation-library batch, O1). Built from FCA Handbook COLL 15 (incl. COLL 15.8.12R / 15.8.2R) and PS21/14 / PS23/7, with figures pinned to the rules or flagged To-verify.