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Aegon has up to date its £12bn office default fund to incorporate non-public markets and extra environmental, social and governance (ESG)-friendly investments.
The pensions and investments agency is partnering with three fund managers to enhance risk-adjusted returns and supply entry to a wider vary of funding alternatives inside its Common Balanced Assortment Fund.
BlackRock will handle a bespoke, diversified different non-public markets technique, together with non-public fairness, non-public debt, actual property and infrastructure. It’ll additionally handle a totally ESG-integrated passive equities and bonds technique with a year-on-year decarbonisation goal, from the fourth quarter of 2024.
Learn extra: New long-term funds set to democratise non-public credit score
Moreover, Aegon Asset Administration will handle a brand new multi-asset credit score mandate, together with international excessive yield, asset-backed securities and rising market debt methods, from the second half of 2024.
It’ll additionally handle a personal debt and different fastened revenue fund, topic to Monetary Conduct Authority (FCA) approval, from early 2025.
And JP Morgan Asset Administration will handle a bespoke technique, providing publicity to non-public fairness, infrastructure and forestry, additionally from early 2025 topic to FCA approval.
Aegon is planning to accommodate the non-public market allocations inside Lengthy-Time period Asset Fund (LTAF) constructions, topic to regulatory approval. The LTAF is designed to make it simpler for personal traders to place cash into long-term, illiquid belongings, together with non-public credit score.
Learn extra: LTAFs look to diversify non-public markets publicity with multi-asset focus
Learn extra: Arcmont receives inexperienced gentle to launch non-public credit score LTAF
Lorna Blyth, managing director, funding proposition, mentioned that the modifications align with Aegon’s net-zero targets, to succeed in net-zero greenhouse fuel emissions for its full vary of default funds by 2050, and a 50 per cent discount in emissions by 2030. It additionally helps its intention to take a position £500m in local weather options by 2026.
“We anticipate many of those options to return from unlisted equities which aligns with our Mansion Home Compact intention to take a position at the very least 5 per cent of our default fund belongings in unlisted equities by 2030,” she added.
“On completion of the Common Balanced Assortment modifications in 2025, we anticipate that we are going to have moved over £30bn of default belongings into funds that think about ESG components.”
Fund administrator Carne Group will probably be appearing because the Authorised Company Director of the Aegon Asset Administration and JP Morgan Asset Administration LTAFs.
Aegon mentioned that the fund’s goal and danger urge for food will stay unchanged. The fastened administration charge won’t change, though a rise to further bills is anticipated.
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