The UK Financial Conduct Authority (FCA) has set out new rules to provide retail investors and a wider range of defined contribution pension scheme beneficiaries with access to Long Term Asset Funds (LTAFs). Introduced by the FCA in 2021, LTAFs are an open-ended authorised fund tailored to invest in long-term illiquid assets, including venture capital, private equity and private debt, real estate and infrastructure. While the FCA acknowledges that LTAFs are a “higher risk product”, it underlines their ability to “provide greater diversification to investment portfolios in exchange for potentially higher returns but less immediate liquidity and longer redemption periods”. Sarah Pritchard, Executive Director of Markets at the FCA, said: “Longer-term less liquid real assets can generate good alternative returns for investors and, crucially, help to grow the UK economy through investments, such as new infrastructure. Our new rules allow retail investors, and pension funds, to invest in productive finance, but they also recognise that long-term investments can be riskier. That is why people will be given clear risk warnings and customer assessments, in line with other higher risk products.” The FCA has also flagged concerns on sustainability-linked loans (SLLs). Following stakeholder engagement on SLLs, the FCA found that the market is not currently achieving its potential, with increased trust and transparency needed to deliver wider uptake. Market participants also said a more prescriptive framework would “improve market integrity” and “reduce the threat of greenwashing accusations”.