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Aviva ‘outcome’ investing range for pension funds

Euan 20Munro 20croppedAviva Investors has launched an open-ended alternative income fund that invests in illiquid assets, ranging from real estate finance to structured finance.

Aimed at institutional investors, the Aviva Investors Alternative Income Solutions Fund is meant to offer a higher income than mainstream bonds, while only being as risky as a fund that invests in BBB-rated investment grade fixed income.

The fund sits on Aviva Investors’ alternatives platform, which manages £22 billion (€25.8 billion) of assets for life insurers and pension funds.

Denominated in sterling, the fund manager will invest in sterling, dollar and euro assets, targeting a gross income return that is 200 basis points about three-month Libor. Overseas currency risk will be hedged.

Euan Munro (pictured), chief executive of Aviva Investors, indicated the importance of ‘outcome’ solutions to the firm since he had joined from Standard Life Investments.

“Three years ago I joined Aviva Investors with a new focus for the business on outcome-oriented solutions. To that end, we have already seen significant inflows into the Aviva Investors Multi-Strategy range. The launch of the Alternative Income Solutions Fund marks another important step in building our business around specific client.”

The UK regulator is currently carrying out a market review of open-ended funds that invest in illiquid assets, prompted by the closure of some UK property funds following the Brexit vote.

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