Same label, different outcomes: XPS analysis reveals wide variation across UK LTAF market

Same label, different outcomes: XPS analysis reveals wide variation across UK LTAF market

15 Sep 2026

Analysis of 22 Long-Term Asset Funds (“LTAFs”) uncovers wide variation in expected returns, asset allocation, liquidity structures and fees, emphasising why investors need to look beyond the LTAF label when assessing the market.

New research from XPS Group reveals significant disparities across the rapidly expanding Long-Term Asset Fund (LTAF) market, highlighting the need for decision-makers to look beyond the label when increasing their allocations to private markets.

The report, Decoding the LTAF Landscape: Same Label, Different Outcomes, analyses data from 22 LTAFs and finds that funds operating under the LTAF banner can offer markedly different investment propositions, with significant variation in expected returns, asset allocation, liquidity sleeve structures and fee models across the market.

Using XPS capital market assumptions to create a like-for-like comparison, the research found a gap of around 5% per annum between the LTAFs with the highest and lowest expected-return. Costs also vary substantially, with total expense ratios ranging from 0.6% to 3.3% per annum, while the proportion of assets allocated to liquidity ranges from 0% to 30% of fund assets.

XPS suggests these differences are likely to become more significant as DC schemes prepare for the Government’s forthcoming Value for Money framework, which is expected to place greater emphasis on investment outcomes and peer-relative performance.

With private market allocations expected to play an increasingly important role in shaping future member outcomes, investment decision-makers will need to carefully consider which LTAFs best align with their scheme’s strategic objectives, risk appetite and operational constraints.

The findings come as more DC schemes are increasing their exposure to private markets as a potential route to improving member outcomes. While LTAFs have emerged as a popular route to gain access, XPS’ analysis shows there is no single LTAF investment approach, with underlying exposures ranging from specialist private equity and venture capital through to private credit and multi-asset approaches.

Neil Maines, Senior Investment Consultant at XPS Group, said:

“The Value for Money framework is already driving a laser focus on achieving strong net of fee returns versus peer DC asset owners. We believe that selecting the right private market allocation will be a key component of meeting the requirements of the Government’s imminent Value for Money framework.”

Joe Howley, Senior Investment Consultant at XPS Group, added:

“Liquidity is one of the most important judgements DC schemes need to get right when investing in private markets. The right balance will depend on the individual circumstances of each scheme, but liquidity should be a deliberate part of the investment strategy rather than simply a by-product of fund selection.”