Aviva eyes pension capital with new £1.5bn net zero property fund

London-based Aviva Investors has launched a new £1.5bn investor fund, which will focus on net zero investments in real estate. 

The company told Net Zero Investor in an email that its newly launched Aviva Investors Real Estate Active Fund has "a long-term absolute return target." 

AI further confirmed to this publication that its primary target for fresh equity commitments is defined contribution pension schemes across the UK.

Tim Russell, a City-based senior fund manager at Aviva Investors, will run the investment vehicle and he and his team plan to approach DC pension funds, master trusts and local government pension funds to invite them to join.

The fund has a strong net zero-related strategy behind it as "net zero audits will be conducted to understand each building’s current net zero alignment, its transition potential, and the solutions available, thereby forming a decarbonisation strategy for each individual asset," Aviva said.

Aviva Investors' chief investment officer, real assets, Daniel McHugh, stressed that real assets are an important element of long-term investment strategies, whether it be for risk or return diversification, or to provide regular, inflation-linked income.

"They are also a vitally important ingredient in the transition towards a just and socially equitable low carbon future," he added.