Catherine Johnston is senior director of product development at Arcmont Asset Management
As part of our series looking at what firms did to win their accolades at the PP Investment Awards 2024, PP speaks talks to Arcmont Asset Management senior director of product development Catherine Johnston about winning the DC Investment Innovation of the Year accolade.
What does it mean to win this award?
Arcmont is delighted to win this award, and to be recognized by the pensions sector for having launched the first and only long-term asset fund (LTAF) to date offered by a specialist private debt asset manager. We believe that this award illustrates how Arcmont is both an active driver of the democratisation of private markets, increasing the accessibility of the asset class to UK pension funds, as well as an innovator within its own industry.
How do your investment strategies help pension schemes meet the challenges they face?
We believe that defined contribution (DC) pension fund managers are increasingly recognising the strong value proposition offered by investment into private markets, however their options to access these asset classes has been historically limited due to the significant regulatory constraints applicable to distributing private capital focussed funds to DC pension schemes.
Under the Mansion House Compact[1], 11 of the UK's biggest DC pension schemes committed to investing at least 5% of their default funds to unlisted investments by 2030. This was predicted to increase savers' pension pots by up to 12%, or as much as £16,000 for an average earner.
Arcmont's LTAF provides a tailored eligible solution for these DC schemes to deploy capital into direct lending, thereby contributing to making these deployment objectives a realistic proposition for the industry. We hope that the launch of our LTAF attracts greater awareness to the regime, and that this leads to an increasing number of eligible structures becoming available to DC schemes for investment in the future.
What do you believe sets you apart from your peers?
Innovation is key at Arcmont and our approach is driven by understanding our clients and their objectives, while leveraging flexible and strategic capital solutions. We believe we have a deep knowledge of the requirements and constraints in all respects, whether return, regulatory or operationally driven.
The UK pension market has always been a core investor base for Arcmont, with over €4bn (£3.38bn)[2] raised from this market since inception, we believe this is evidenced by the strong demand for an alternative to traditional fixed-income investments. Investment in private debt can enhance portfolio diversification whilst also offering access to the illiquidity premium available in private markets, but we recognised that there were significant structural barriers previously prohibiting DC scheme investment in the asset class.
How will you continue to improve your investment offering over the coming 12 months?
We will continue to focus on increasing the accessibility of private debt to a broader asset base, through the provision of both structuring solutions and education around the asset class.
We look forward to participating in a number of industry events focussed on increasing the visibility and adoption of the LTAF structure, and supporting our DC scheme clients as they research, structure and execute their own private markets allocation programs.
The winners of the 11th annual PP Investment Awards were announced at a reception in London on 20 November. To see the full list of winners and find out more about the awards, visit: www.investmentawards.co.uk
