The global asset management arm of insurance giant Aviva Plc has set a target of £10 billion in investments into infrastructure and real estate projects in the UK over the next three years.
“Aviva is investing in UK infrastructure and real estate to help our economy and communities bounce back,” said Amanda Blanc, the group’s chief executive, when the goal of unit Aviva Investors was announced.
“We plan to invest in the UK’s regions and cities, in critical areas such as social housing, renewable energy, and rail networks. The investments being made will ultimately fund people’s savings and retirement, aiming to deliver stable returns to our customers and funding a sustainable future for the UK.”
It was noted that nearly £6.5 billion of commitments will be from Aviva group companies, while the remaining amount is expected to come from external client mandates. Already a significant investor in infrastructure and real estate through its £47 billion real assets business, Aviva Investors aims to direct more than £3.5 billion into UK structured finance and private corporate debt strategies.
Aviva Investors’ chief investment officer for real assets Mark Versey stated: “Investors are recognising the enhanced yields they can get from holding real assets compared to the return on a comparable publicly listed security. Being backed by an asset with a tangible value means that they often carry much lower volatility too.
“The market uncertainty caused by COVID-19 should make the resilience of long-term cashflows offered by real assets increasingly appealing to institutional investors. With interest rates likely to remain lower for longer, we expect clients will continue to look towards the sector for risk diversification and returns.”