Willis Towers Watson has launched an open-ended real assets fund which the firm hopes could raise as much as £2 billion to £3 billion over the next few years.
The fund, called the Secure Income Fund, would be invested in real estate, infrastructure, renewable energy and real asset debt investment managers with the capacity for investing in secondaries and making co-investments.
The aim is to provide the UK’s defined benefit pension schemes with an inflation-linked cash flow through investments which generate a better risk-adjusted return than investment-grade credit and index-linked gilts.
“With many institutional investors continuing to prioritise inflation-linked income, the real yields available from traditional assets have been squeezed,” said Karen Dolenec, global head of real assets at Willis Towers Watson.
“Clients have been telling us about the challenges which they have faced in establishing a presence in the alternative area of secure income investments. The key benefit of the fund is that it offers a simple solution for individual clients to benefit from our sourcing skills in an attractive but difficult to access opportunity set.”
So far the London-based advisory and investment firm has raised £210 million for the strategy. While there are no allocation targets along asset class lines, rather the firm is focused on the risk profile of the investments, it does have controls in place to ensure that there is sufficient diversification along a number of dimensions.
Willis Towers Watson’s investment business has assets under advisory of over $2.3 trillion and over $87 billion of assets under management.