Real estate investment manager, AEW UK has secured £42.5m capital from Aviva Investors Global Indirect Real Estate (GIRE) for the launch of its Real Return funds, which targets a mix of alternative and traditional asset classes.
The fund’s strategy will look at investing in all sectors, unfettered by an IPD benchmark, to allow access to the wider UK investible universe.
Sectors are likely to include alternatives such as housing, leisure, healthcare, hotels and social infrastructure, blended together with opportunities in the traditional markets where property fundamentals are strong.
The AEW UK Real Return Fund is an FCA regulated, open ended, core-style PAIF with a total real return target of 4% pa net of fees and expenses.
John Gellatly, Aviva Investors’ head of Emea GIRE said, “We are pleased to be supporting this new launch and strategy which matches the return objectives and liability matching requirements of many of our clients who, as mature pensions schemes, are seeking long term relatively stable returns.
“We are also pleased to be backing AEW and Ian, who have a long and successful track record investing into a range of alternative property types.”
Ian Mason, Portfolio Manager, AEW UK Real Return Fund said, “So far the reaction from potential investors has been very supportive and we already have terms agreed for an additional £20m from a major UK Pension Fund.
“The fund is challenging the way investors can think about property as a real asset and match for liabilities. We have found it very rewarding to partner with Aviva on this new strategy.
“They too recognise that, increasingly, property does not work as a pure ‘growth’ asset with the inherent volatility from funds all chasing the same benchmark. Property portfolios should be dynamic and reflect the growth in the real economy rather than following a static benchmark.”