Aviva Investors has launched a fund targeting long-leased properties in continental Europe.
The global asset management platform of UK insurer Aviva has so far collected €105 million from two insurance investors for the fund, Aviva Investors Continental European Long Lease Strategy Fund (CELLS).
The firm aims to provide secure, predictable cash flow from investing in predominately index-linked leases. Aviva will target Continental European properties with an initial focus on office, retail and alternative sectors in Germany, Austria, Benelux and Scandinavia.
The properties it will focus on will be long-leased to high quality tenants with remaining lease terms of typically at least 15 years.
The firm will aim to make quarterly income distributions of between four and five percent per annum from the fund.
“The launch of CELLS represents a further evolution in our outcome-oriented investment solutions offering, building on our pensions and insurance heritage,” commented, Ed Casal, chief executive, global real estate at Aviva Investors.
“We launched the Lime Property Fund in the UK in 2004, and can now leverage that 12 year track record as well our deal sourcing and robust credit analysis expertise to deliver a long lease strategy in Europe. We believe that a defensive cash flow-focused strategy such as CELLS can assist our investors in meeting their cash flow matching requirements.”
The fund will be overseen by Gil Bar, managing director, Germany and Martin Zdravkov, interim fund manager. The pair will work closely with Aviva Investors’ UK Long Income team, which has managed long income strategies for 20 years.
Aviva Investors operates in 15 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £345 billion as at 31 December 2016.