Global asset manager Aviva Investors has been appointed by London CIV, the Collective Investment Vehicle for the group of London Local Authorities (LLA) Pension Funds, to manage its newly-created Inflation Plus Fund.
Initially launched with £107 mln from London Borough of Bexley and the Borough of Redbridge, the Fund seeks to deliver consistent, stable, inflation-linked returns by investing in a diverse portfolio of income- generating real assets. It will primarily target opportunities in real estate long income, including investment in long-lease and ground rents. It will also have the flexibility to invest across other asset classes such as infrastructure debt and real estate debt, in order to source the best relative value opportunities.
‘In this challenging investment environment, predictable, inflation-linked returns offer an attractive defensive quality to portfolios, making long income a natural destination for pension schemes as they look to reduce risk,’ said Mark Versey, CIO, Real Assets, at Aviva Investors.
The hope is that other London Borough Pension Funds will follow Bexley and Redbridge into the fund, added Versey. ‘We anticipate it growing significantly over time. We look forward to helping this group of local authorities meet their investment objectives and cashflow requirements on behalf of their members.’
Aviva Investors’ Real Estate Long Income (RELI) strategies were first introduced in the late 1990s with the funding of Public Private Partnerships (PPPs), followed by the creation of the Lime Property Fund in 2004 and the REaLM (Returns Enhancing and Liability Matching) fund range in 2011. Together, the strategies account for £5 bn in assets under management.
