Aviva Investors, the asset management business of Aviva plc, announces it launched a Venture and Growth Capital fund which aims to give investors better access to “early-stage” companies and technologies.
The Fund reportedly receives an initial c £150 million commitment from Aviva, as it looks to open up investment opportunities in “tech sectors to more than more than four million Aviva pension customers.”
The Aviva Investors Venture & Growth Capital LTAF is the fourth to be launched by the asset manager “under the Long Term Asset Fund (‘LTAF’) regime, which has been designed to help investors more efficiently access long-term assets.”
It launches after Aviva Investors established “a Venture and Strategic Capital capability within its Private Markets business.”
Open for allocations from external institutional investors, the Fund will receive an initial subscription of “c.£150 million from Aviva through a combination of assets and cash commitments, as it looks to provide opportunities for more than four million members across 26,000 corporate pension schemes in Aviva’s default DC Workplace pension business to support the growth of innovative companies and cutting-edge technologies.”
The launch builds on the Mansion House Compact, announced by the UK Government in July 2023, which outlined a “series of proposals to unlock investment into emerging industries, including unlisted companies, and to support growth across the economy.”
Aviva is a founding signatory to the Compact, as it seeks to encourage investment into “unlisted equities across its DC pensions business.”
Aviva Investors Venture & Growth Capital LTAF is structured as an evergreen fund, providing “injections of investment capital at repeating intervals and with no fixed lifespan to the Fund.”
It seeks to give investors better access to “early-stage companies, whilst providing them with the benefit of diversification and the potential for returns offered by Private Markets.”
Featuring a UK bias, the Fund will invest across multiple venture and growth stages across “the UK, Europe, and North America, with a focus on four key sectors; Fintech and Insurtech, Healthtech, Science and Technology, as well as Climate and Sustainability.”
It will aim to provide capital growth whilst targeting “an overall return of at least 15 per cent per annum on a rolling five-year basis (gross of annual management charges).”
Venture investments will be made “through third-party funds and evergreen vehicles to access a wide range of external managers, co-investment opportunities and deal flow, with direct investment in later-stage opportunities helping to scale-up growth companies.”
All with the aim of lowering risk, “reducing fees and supporting the overall returns of the Fund.”
The Fund expands Aviva Investors’ LTAF range, which includes three funds that together represent “more than £3 billion and provide investors with greater access to investment opportunities in Private Markets.”
Alongside the Multi-Sector Private Debt LTAF which launched in November, the range “includes Aviva Investors’ Real Estate Active LTAF (‘REALTAF’) and its Climate Transition Real Assets LTAF (‘CTRAF’), which was converted to sit under the new regime.”
With the UK’s private sector workplace defined contribution (DC) pension market estimated to represent “approximately £650 billion in 2024 and forecast to grow to around £1.3 trillion in 20441, the new Fund has the potential to put investment capital to work in supporting future growth.”
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