Aviva Investors has launched the £1.5bn Aviva Investors Real Estate Active LTAF (REALTAF) fund – its first long term asset fund (LTAF) and one of the largest funds of its type launched to date.
The LTAF regime is a new category of fund designed to provide access to long-term private market assets. Aviva said the fund, which consists of an initial £1.5bn portfolio of “carefully selected” direct real estate assets seeded by Aviva UK Life, will enable a broad range of institutional and professional investors to access “real assets investments more easily, whilst better matching the liquidity of the underlying assets with that of the fund”.
Daniel McHugh, chief investment officer, real assets, at Aviva Investors, said: “As one of the largest investors in UK real estate we are thrilled to bring REALTAF to the market. It represents the largest LTAF on offer today for wealth and institutional investors, and one we want to make the go-to fund of choice for investment in real assets.
“We are also pleased to have the backing of Aviva UK Life in creating a fund which we believe represents the future of real assets investing. Not only does this demonstrate our ability to innovate and provide new products to meet the evolving demands of the market, it also shows the confidence we have to consistently originate assets, at scale, whilst matching investors’ underlying liquidity requirements.
“Real assets are an important element of long-term investment strategies, whether for risk or return diversification, or providing regular, inflation-linked income. They are also a vitally important ingredient in the transition towards a just and socially equitable low carbon future.
“Yet, until now, a significant portion of the UK’s wealth and pension market – particularly defined contribution schemes – have not been able to allocate to real assets, and certainly not to the extent they would like. We firmly believe the LTAF regime will have significant benefits for retirement portfolios, helping to improve long-term investment outcomes for our clients and, ultimately, individuals saving for their retirement.”
Pierre Biscay, head of customer investments at Aviva UK Life, added: “We are delighted that our with-profits funds are able to support the launch of REALTAF, giving them the opportunity to pool and diversify their existing property holdings whilst also benefitting from the potential growth opportunities available in the sector. Real estate remains a key part of our investment strategy and has delivered excellent value for our customers to date. The launch of REALTAF enables us to continue to access the asset class far into the future under a new and innovative fund structure.
“As one of the largest investors in the UK, Aviva has the power to create a huge amount of positive change. We already invest a substantial amount into the UK and its communities by financing offshore wind farms and social housing schemes, improving the energy intensity of the built environment, funding restoration, carbon capture and woodland creation schemes.
“All of this supports our aim to help the UK become climate ready. We believe this new fund can help us do even more, making the most of the investment expertise of the real assets business and its ability to find projects that can deliver long-term value for our with-profits customers, us as a business, and for the UK.”
