Low yields pose challenges to institutional investors looking for income. But there are alternatives. For investors prepared to sacrifice some liquidity, illiquid assets such as infrastructure and real estate debt offer superior yields to government bonds.
Managing $27 billion* in Alternative Income, Aviva Investors can deliver a broad range of tailored alternative income solutions to meet each client’s specific objectives and requirements.
They offer a pick-up in yield over traditional credit without significantly increasing risk. This makes them particularly attractive for long-term investors such as pension schemes and insurance companies. The higher yield is to compensate for the illiquid and often complex nature of these investments.
* Source: Aviva Investors as at 30 September 2015
Our Alternative Income Solutions platform offers a multi-strategy approach that harnesses our expertise across a wide range of asset classes.
These assets can complement any traditional fixed income mandate or integrate into a wider liability-aware strategy.
With alternative income solutions, investors benefit from:
- Strength and scale of Aviva plc by co-investing with one of the UK’s largest insurance companies enabling access to opportunities that might otherwise not be unavailable.
- Access to our in-house expertise in an exceptionally wide range of alternative asset classes.
- Extensive history of investing for pension and insurance markets means uniquely qualified to understand both the assets involved and the liabilities.
- Understand importance of providing ongoing world-class service in the form of reporting, operational and legal support.
Why an alternative income strategy?
Some of the reasons to consider an alternative income strategy:
- A range of alternative income streams.
- Provides sustainable cash flows against pension liabilities.
- A risk profile comparable to traditional corporate bond investments.
- Diversifies counterparty risk away from traditional senior unsecured corporate bonds.
- Typically employs covenants and collateral to contain losses in the event of default.
- An enhanced yield compensates for the complexity and illiquidity of the assets.
- Co-invest alongside Aviva Investors.
Aviva Investors also has an alternative income solutions platform allowing for a multi-strategy approach. It is one of our core business strengths and is populated with many assets due to well-established origination and deal pipelines.
Alternative assets available on the platform
- Long-lease real estate
- Real estate debt financing
- Infrastructure assets
- Social housing
- Ground rents
- Whole loans
- Government-guaranteed loans
- SME loans
- Trade finance
- Negative basis packages
- Corporate private placements
- Collateralised loan obligations (CLOs)
- Private equity financing
- Forward bonds
The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.