Aviva Investors, the global asset management business of Aviva, has revealed its Real Estate Long Income (RELI) team secured £1bn of new capital commitments over the course of 2020.
The figure, which is a record number, was driven by increased investor demand for an asset class which has performed well despite a challenging environment following the global pandemic.
The £1bn of new capital commitments came from a mixture of local authority and institutional mandates, with investors seeking resilient income streams that can also offer cashflow matching characteristics. Of the £1bn, £239m originated from public sector capital, including London CIV, with the balance from new and existing UK and European institutional clients.
The growth in demand for Long Income strategies saw assets under management for Aviva Investors’ Long Income business pass £5bn, following acquisitions totalling £528m, across the logistics, office, hospitality and residential sectors.
These figures follow publication of Aviva Investors’ 2021 Real Assets House View in February, which cited Long Income as being expected to deliver best relative-value among real assets strategies.
Renos Booth, head of Real Estate Long Income at Aviva Investors, said: “2020 was challenging for markets, businesses, communities and investors, so we are pleased to have been able to deliver strong investment outcomes for our clients. The increased inflows into our Long Income strategies show that investors are increasingly attracted to the nature of these investments in the current low interest environment.
“We believe the relative value of the sector will continue to drive positive long-term performance, supported by yield compression and strong asset management. Long income strategies also fit well with our commitment to improving the ESG credentials of our entire real assets portfolio, with the long-term nature of the investments offering a platform to deliver meaningful societal change.”
The growth of the Long Income business has been led by Aviva Investors’ flagship Lime Property Fund, which passed £3bn of AUM in 2020, whilst capital commitments from the public sector now account for 54% of the investment.
