Aviva Investors’ seven-fund, £1.2bn (€1.5bn) Sustainable and Responsible Investment funds group headed by Peter Michaelis is to transfer to boutique firm Alliance Trust Investments.
Aviva and Dundee-based Alliance Trust said an investment-advisory agreement would be implemented by the end of August and that the funds would transfer across early next year.
The funds affected are Aviva’s Sustainable Future Absolute Growth, Sustainable Future Corporate Bond, Sustainable Future European Growth, Sustainable Future Global Growth, Sustainable Future Managed, Sustainable Future UK Growth, UK Ethical, and Sustainable Future Pan European Equity. The range also includes a Luxembourg fund, the future of which is under review.
The deal comprises a £1m payment from Alliance Trust and a revenue share and follows the closure of Aviva’s SRI equities desk in London earlier this year amid a cut of 160 jobs and a strategic rethink.
The five-member team will continue to provide investment advice for the SRI funds under an advisory agreement and be based in London. The companies stressed that the funds would be managed with the same investment objectives and process.
Aviva Investors’ Interim CEO Paul Abberley said there would be a “seamless transition of responsibilities”.
The listed Alliance Trust is headed by Katherine Garrett-Cox, the former investment chief at Morley Fund Management, the funds arm of insurer Aviva which was renamed Aviva Investments in 2008.She joined Alliance Trust as Chief Investment Officer in 2007 and become CEO in in 2008.
Alliance Trust was founded in 1888 and had £2.8bn in assets under management at the end of 2011. It is a signatory to the UN-backed Principles for Responsible Investment.
It faced pressure from activist investor Laxey Partners and fund firm Aberdeen Asset Management this year over lacklustre performance.
The deal comes as Alliance Trust has announced it is restructuring its portfolio, cutting its holdings from around 200 to less than 100 by the end of 2012.
“This is a good outcome for our clients and also our business,” said Abberley, who took over when Alain Dromer exited in a management reshuffle in May.
“This is a good outcome for our clients”
Alliance Trust Investments’ Managing Director Ed Troughton said the Aviva team’s skills complements its approach in global equities and fixed income.
“These three core parts of our business will now allow us to design tailored, specialist, investment solutions for our clients – both at the fund and segregated level,” he said. The move would “help accelerate our path to profitability”.
Aviva’s independent SRI Advisory Committee – which includes figures such as environmentalist Jonathon Porritt – will continue to work with Michaelis’ team after the transfer. Announcement