The BlackRock Diversified Alternative Strategies LTAF will invest in a blend of private market asset classes, such as infrastructure, private credit, private equity and real estate.
The new vehicle will invest in strategies with sustainability characteristics, such as those supporting the transition to a low carbon economy, or those that have a social impact.
Schroders Capital unveils UK's first LTAF
With the upcoming launch of the fund, BlackRock will have one of the first four LTAFs authorised in the market, alongside Aviva Investors' £1.5bn Real Estate Active LTAF, Schroder Capital Climate+ LTAF and Schroders Greencoat LTAF.
Sarah Melvin, head of UK at BlackRock, said the go-ahead by the regulator marks "an important milestone" in expanding the investment opportunities for UK DC members and providing better investment outcomes.
"We believe our diversified alternatives strategy can provide the risk-adjusted returns investors need to meet their retirement aspirations and make it simpler for them to access a range of private markets strategies through one fund," she said.
FCA launches consultation to broaden access to LTAF
Tarek Mahmoud, head of BlackRock multi-alternatives solutions, added: "Our LTAF will provide DC members with diversified exposure to private market assets, underpinned by BlackRock's deep expertise in multi-alternatives portfolio construction, risk management and sustainability. This allows for better sourcing, better value for money and better outcomes for members.
"The ability to blend multiple private market asset classes is an intricate task that requires high-quality investment experience, leading technology and specialist teams who can access the best investment opportunities globally."
While these funds are currently only available to DC clients, an ongoing FCA consultation on broadening access to LTAFs may mean that these vehicles will also have a role to play in the UK retail market in the future.