Aviva Investors is making the U.S. a priority, joining several other U.K.-based management firms that are experiencing significant growth in the U.S.
The London-based manager's growth is due in part to the increasing popularity of its target return strategy and increased investor appetite for multiasset-class strategies, particularly outcome-oriented and customized solutions.
Aviva's North American assets totaled $14.6 billion as of Dec. 31, up 52% from a year prior. Most of this growth comes from the Aviva Investors Multi-Strategy Target Return portfolio. OPTrust — which manages the C$19.05 billion ($14.3 billion) Ontario Public Service Employees Union Pension Plan in Toronto — invested an undisclosed amount in the AIMS Target Return strategy in December.
Also helping are its subadvisory relationships with Sun Life Global Investments in Canada and Virtus Investment Partners in the U.S.
“We've seen significant growth,” said Timothy W. Jenkins, head of U.S. sales for Aviva Investors Americas.
As of March 31, the AIMS Target Return strategy had $10.2 billion in assets under management globally, up 106% from same period a year ago. Of that total, roughly two-thirds is institutional and about 11% of the total is from North America. The strategy was launched in July 2014.
The firm's North American institutional growth also is due to Aviva's asset-class-specific capabilities, Mr. Jenkins said, including in fixed income, equities and real estate. North American AUM rose by more than 75% in global high-yield, U.S. high-yield and Canadian core strategies in 2016.
Texas Employees Retirement System, Austin, in April 2016 committed up to $60 million to Aviva Investors Real Estate Capital Global Co-Investment Fund, which invests with emerging real estate managers focused on opportunistic real estate properties in the U.S.
Almost one year into his tenure as CEO of Aviva Investors, following his departure from Standard Life Investments in July 2013, Euan Munro told Pensions & Investments one of the biggest challenges he'd had to that point was differentiating between “global” and “international.”
“ Aviva Investors has been international for a very long time, but is now really coming together as a global asset manager,” Mr. Munro said at the time.
Said Mr. Jenkins: “Since Euan Munro became our CEO, multistrategy has been the cornerstone of our growth, particularly in North America.”
As previously reported, Aviva is seeing considerable competition, particularly within the U.S. Standard Life Investments PLC, Schroders PLC and Legal & General Investment Management also are bolstering their U.S. focus.
Mr. Munro's former company, Standard Life, is emphasizing its Global Absolute Return Strategies.
SLI managed £63.8 billion ($65.9 billion) in multiasset strategies globally as of Dec. 31, up 6.3% from the same period a year earlier and up 39.3% from Dec. 31, 2014. That includes GARS, its absolute-return bond fund and its other global-focused strategies.
Data from SLI show its North American AUM — which is all institutional — was $16 billion as of Dec. 31, up 8.5% from the year before and up 56.8% from two years prior.
Jack Boyce, managing director and head of North American distribution at SLI, Boston, said the size and scope of the U.S. market makes it very attractive for non-U.S. managers.
“It's a particularly challenging market to set up shop in the U.S., as it's got a low barrier to entry yet high barrier for success,” said Mr. Boyce.
In North America, SLI started with just two employees in 2002 and minimal AUM. Now, SLI North America has more than 105 employees with offices in Boston, New York, Los Angeles and Toronto.
“Certainly, it's a very big market in the U.S. and we've seen a good deal of success in multiasset,” said Mr. Boyce. “We're a very early player in multiasset, and our history at that has served us very well. But we focus on long-term success.”
In addition to multiasset, emerging market debt and global equities have contributed to SLI's growth in North America.
In regard to the impact of growing competition within the U.S., Mr. Boyce said: “I am very confident in the strength of our multiasset platform. It's not just GARS.”
Sophie Baker contributed to this story.