British-American multinational insurance services provider Willis Towers Watson (WTW) is preparing to launch its first Luxembourg-based private equity fund in the coming months. The firm has already has secured over 500 million euro in commitments. The move follows WTW’s recent announcement of a UK private equity fund.
The new fund will be known as WTW Private Equity Access Fund, or WTW Peaf, and will be structured as a Reserved Alternative Investment Fund (Raif) under Luxembourg law, focusing on private equity opportunities, including co-investments. This is the first time WTW is offering its institutional private equity business as an investment solution. According to WTW, this structure aims to address the long-term needs of various end investors, particularly Defined Contribution (DC) schemes, which typically find it difficult to access private assets. The fund will also target private wealth investors.
WTW believes that private equity investments, known for their high illiquidity premiums, offer the best opportunity to maximize long-term returns in private markets, making them suitable for illiquid DC strategies.
The Raif will include mechanisms to align the valuation with the net asset value of the underlying assets and synchronise liquidity with the redemption time, involving an external party for fund valuation.
Three years development
Catheleyne van Erp, head of WTW Investments Netherlands, noted that the development of the new fund took three years. This fund offers end investors a dedicated private equity allocation in a fund structure, reportedly the first of its kind in the market.
The team behind this fund is already working on other long-term solutions, focusing on a broader offering for savers in Europe and the Asia-Pacific region. Regulatory approval for the launch is still pending, expected in the second quarter.
UK variant
Over a month ago, WTW also announced the launch of a private equity fund in the UK, to be structured as a Long Term Asset Fund or Ltaf, the UK’s variant of the European Eltif, a legal form for fund vehicles that can be used to offer private market investments to retail investors. The UK fund has secured 450 million pounds in commitments so far, including a commitment from pension platform LifeSight, which has pledged to allocate 5% of its default mutual fund to WTW’s private equity fund.