London CIV has appointed Aviva Investors to run its newly-created inflation-plus fund, launched with £107m of investment.
The fund is designed to provide the Local Government Pension Scheme (LGPS) pool with consistent, stable, inflation-linked returns by investing in a diverse portfolio of income-generating real assets. It will primarily target opportunities in real estate long income, including investment in long-lease and ground rents.
The £107m of initial funding has been provided by the LGPS funds of the London boroughs of Bexley and Redbridge.
London CIV said it is the only strategy on its platform seeking to address cashflow and liability requirements for member schemes, and would draw on Aviva Investors' £46bn real assets business.
Pool interim chief investment officer (CIO) Kevin Corrigan said: "The demand for alternative income from our investors will likely increase, particularly given the current environment so this is an important addition the London CIV suite of funds."
Aviva Investors CIO for real assets Mark Versey added: "In this challenging investment environment, predictable inflation-linked returns offer an attractive defensive quality to portfolios, making long income a natural destination for pension schemes as they look to reduce risk.
"Our hope is that other London borough pension funds will follow Bexley and Redbridge into the fund and we anticipate it growing significantly over time. We look forward to helping this group of local authorities meet their investment objectives and cashflow requirements on behalf of their members."
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