Aviva Investors is targeting £10bn of UK infrastructure and real estate projects over the next three years.
Citing the UK’s current funding shortfall in meeting infrastructure needs, the group said that the £10bn of capital will support the development of UK real estate and infrastructure, including renewable energy projects in-line with the government’s long-term commitment to meet net-zero emissions by 2050.
The global asset management business of Aviva expects to direct over £3.5bn into UK structured finance and private corporate debt strategies.
Almost £6.5bn of commitments will come from Aviva group companies, with the remaining amount expected to come from external client mandates.
Aviva Investors is already a significant investor in infrastructure and real estate via its £47bn Real Assets business, which targets investment opportunities in both asset classes, as well as private debt and structured finance.
Amanda Blanc, chief executive at Aviva, said: “Aviva is investing in UK infrastructure and real estate to help our economy and communities bounce back. 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.”
Mark Versey, chief investment officer, Real Assets at Aviva Investors, added: “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.”