Aviva Investors takes over management of Henderson fund

Henderson Global Investors has announced that Aviva Investors will become the investment manager and Authorised Corporate Director (ACD) of the Henderson International Property Fund with effect from 2 August 2010.

Following the transition, Aviva Investors proposes to combine the assets of the £183 mln (EUR 220 mln) Henderson International Property Fund with the £223 mln held in its existing European and Asia-Pacific real estate funds subject to investor and regulatory approvals.

The agreement follows a review by Henderson of the long-term strategy of its international property fund which concluded that the fund needed to increase in both size and regional diversification to remain effective over the longer term. The fund was unlikely to achieve this organically at the rate necessary to take best advantage of favourable market conditions.

Henderson's selection of Aviva Investors as the fund's new investment manager is based on Aviva's global real estate capability and experience in managing direct investment property funds. Aviva Investors has dedicated teams in London, Paris, Frankfurt, Singapore and Melbourne.

Mark Carpenter, director of UK Property Retail Funds at Henderson, said greater regional diversification and scale are major prerequisites for the fund to maximise returns over the longer term. 'Unfortunately, despite the wealth of experience and expertise of the Henderson property business, we do not have other international property funds, suitable for retail investors, which could be merged with the fund. We therefore believe that transferring the Henderson International Property Fund to Aviva Investors is in the best long-term interests of investors.'

The merger does not affect the management of the £832 mln Henderson UK Property Unit Trust which has a portfolio of 52 properties and 118 tenants in the UK.

Ian Womack, CEO Real Estate at Aviva Investors, said: 'The fund structures are well-aligned and by combining the European and Asian assets, clients should benefit from greater diversification and scale, as well as the specialist on-the-ground management focus of our regional property teams.'

'The resulting funds will provide an excellent platform for investment exposure to the Asian and continental European commercial property markets. They should also prove attractive to new investors, increasing the potential for further growth in scale and diversification. We believe that the transfer and combination of the funds provides investors with the best possible outcome.'