Aviva’s Encore+ sale paves way for new fund launches

Aviva Investors' sale of its interest in the pan-European Encore+ fund paves the way for new Continental European funds as well as possibly UK products, according to its property chiefs.

London-based Aviva revealed last week the creation of a £37 bn (€42 bn) real assets division by integrating direct real estate, infrastructure, structured finance and private debt under a single leadership and operating structure.

At the same time, it has sold off its interest in the £6 bn (€6.8 bn) Encore+ fund and its indirect Real Estate MultiManager group to LaSalle Investment Management as it looks to focus on being a direct operator with full control over fund and asset management, origination and distribution.

Daniel McHugh, managing director, real estate investment, said: ‘The sale of our interest in Encore+ very much clears the way for us to launch new products directly managed and operated by ourselves. That is absolutely the plan and we are pressing ahead with that.’

David Skinner, managing director, real estate strategy and fund management, added: ‘We now have the capability to offer the full service range within our real estate investment management business.’

Among options under consideration in Continental Europe is a pan-European office fund. However, no final decisions on the first product to launch have been taken as a strategy review is under way.

Aviva has adopted a new 'cluster' strategy and is culling its over-diversified UK portfolio, selling 200 properties per year from 2016 to 2018, recycling capital into ‘high conviction markets’ where the company is ‘demonstrably expert’ or has an ‘information advantage’, such as London, Manchester, Birmingham, Cambridge and the Thames Valley for offices.

The same approach is being taken for Continental Europe with Amsterdam, Berlin and Munich high on its list of preferred locations.

McHugh said: ‘The products we come up with will follow a similar investment thematic approach in Europe as for the UK.’

Aviva expects to increase headcount in Europe to support new funds.


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