Aviva Investors launches alternative income fund

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Aviva Investors launches alternative income fund

Aviva Investors, the global asset management business of Aviva, has launched an alternative income fund.

The open-ended fund offers access to illiquid alternative credit strategies while maintaining an overall risk profile in line with BBB-rated investment grade credit. It will make regular income payments and reinvest capital subject to liquidity requirements. The fund is denominated in GBP and will invest in GBP, USD and EUR assets; hedging any overseas currency risk.

The fund provides institutional investors with access to a multi-asset alternative credit portfolio that invests in real estate finance, infrastructure debt, private corporate debt and structured finance.

It targets a gross income return of 3 months GBP LIBOR plus 200 basis points, seeking the best relative value across the private asset spectrum whilst offering diversification from more traditional liquid credit strategies. It is managed by Barry Fowler, managing director of alternative income solutions, alongside fund managers James Tarry, Ted Jennings, and Craig Mackenzie.

“Through our pension and insurance heritage we have over 30 years’ experience of managing alternative income assets, with the platform growing to more than £22bn after seeing strong inflows in recent years. Institutional investors can now gain access to our wide ranging alternative income expertise through the newly launched Aviva Investors Alternative Income Solutions Fund or through the existing offering of bespoke alternative income solutions designed to meet specific client needs,” said Mark Versey, CIO, global investment solutions at Aviva Investors.

Fowler added: “In a low interest rate environment, institutional investors want high-quality cash flows to meet future liabilities with better returns than are available in publicly-traded markets, including government bonds. Alternative income assets have such characteristics, and typically demonstrate lower defaults and higher recovery rates relative to liquid comparables. The fund takes a multi-asset approach to provide access to a greater array of illiquid opportunities and to increase diversification benefits.”