Aviva Investors has launched a dedicated venture capital (VC) and strategic capital capability to its investment offering, as part of a wider project to restructure its real assets business, which was recently rebranded as Aviva Investors Private Markets.
The newly created ‘VC and Strategic Capital’ investment desk will be realised through the migration of the Aviva Ventures investment team to sit within Aviva Investors’ private markets function, which already manages over £40bn (€47.5bn) in assets under management, including equity and debt strategies in real estate and infrastructure, as well as private debt and structured finance.
The decision follows the Mansion House Compact announcement in 2023 by then chancellor Jeremy Hunt. It calls on defined contribution (DC) pension schemes to boost investment in UK unlisted equities, with signatories, including Aviva Investors, expected to allocate at least 5% of their default funds to unlisted equities by 2030.
This latest move comes as Aviva Investors continues to expand its private markets offering to meet the evolving demands of investors, particularly DC pension funds, which have historically not been able to access – or allocate to – private markets investments in a way which can optimise long-term investment outcomes.
It also follows the launch of two Long Term Asset Funds, the £1.6bn Real Estate Active LTAF in May 2023, which was the largest LTAF brought to market at the time of its launch, and the conversion of the Aviva Investors Climate Transition Real Assets Fund to sit under the new LTAF regime. The two funds together account for more than £2bn in assets under management, the manager said.
Led by Ben Luckett, managing director, VC and Strategic Capital, the Aviva Investors VC and Strategic Capital team has already managed VC investments on behalf of Aviva’s balance sheet for over 10 years and currently oversees commitments in excess of £450m. It will initially comprise five full-time employees who will move across from their existing roles.
Mark Versey, chief executive officer at Aviva Investors, said: “This is a terrific example of Aviva Investors in growth mode. Private markets assets today are severely underrepresented in the portfolios of UK DC pension funds relative to global peers. Driven by the UK’s supportive policy environment, which is epitomised by the Mansion House Compact, the scale of the potential investment opportunity is significant.”
He added: “With two LTAFs already in the market, we are actively looking at how to give clients suitable access to the full breadth of benefits that private markets can offer, including unlisted equities.”
Jill Barber, chief distribution officer at Aviva Investors, added: “The creation of a dedicated venture capital investment capability will enable our clients to access some of the most exciting and dynamic growth areas in the economy. We believe the potential returns are attractive and the addition of this investment team means we can continue to meet our clients’ increasing demand for exposure to opportunities across private markets.”
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