The assets under management (AUM) of long-term asset funds (LTAF) approved by the Financial Conduct Authority (FCA) have increased to around £7.3bn, analysis from Morningstar has shown.

This represented an increase of £2.3bn from the £5bn of AUM in LTAFs in June 2025, while there was also around £3.1bn of additional committed capital that was yet to be called.

The majority of LTAFs’ AUM was represented by institutional investors, such as defined contribution (DC) pension schemes, alongside active participation from the wealth sector.

However, Morningstar noted that adoption among retail investors remained limited.

There are currently approximately 25 LTAF strategies available in the UK, primarily focused on private multi-asset and private debt.

A smaller number of funds are focused on private equity, infrastructure, venture capital, and property.

The vast majority of LTAFs were global, although there were some funds that invest only in Europe and/or the UK.

Morningstar said that, based on its discussions with asset managers, several LTAFs were in the process of receiving FCA approval, and were planned to be launched in 2026.

Since 6 April 2026, LTAFs have become permitted investments within stocks & shares ISAs, which Morningstar argued could be a “catalyst” for further AUM growth and LTAF launches through the retail sector.

This could also lead to progress in terms of platform availability of LTAFs, the firm added.

“Allowing LTAFs into stocks & shares ISAs is an important signal of the direction of travel,” commented Morningstar principal, manager research, Evangelia Gkeka.

“It has the potential to broaden access to private assets, but it doesn’t remove the need for careful due diligence.

“These are complex, semiliquid products, and education – particularly around liquidity terms, fees, valuation and allocation processes and realistic risk return expectations – will be critical if the retail channel is to scale responsibly.”

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