Aviva Investors to pull back from retail fund market

A statement from the group said it plans to remove its London-based European, emerging markets, global and sustainable responsible investments (SRI) equity desks.

The group has declined to comment on what effect these changes could have on John Botham’s £140.2m Aviva Investors European equity fund, for example.

Other funds that would appear to fall under the shutdown could include the £203.3m Aviva UK Ethical fund which is run by Neil Brown and Peter Michaelis.

The Aviva statement said it was “prioritising its distribution effort towards the institutional market” and streamlining its business to focus on fixed income, real estate and multi-asset

The job losses represent roughly 12 per cent of Aviva Investors’ workforce, with the majority of cuts coming from the London office.

The group also plans to refocus its Environmental, Social and Governance (ESG) investment monitoring activities, establishing a new Global Responsible Investment Team covering all assets under management.

However the group said it plans to retain its indexing and quantitative capability and will retain on active portfolio management capability in each of the main markets for the multi-asset funds.

The changes come after the group’s chief executive Alain Dromer conducted a comprehensive business review.

The group said the conclusion of the review was that the business strategy “is sound but that greater focus in core areas of strength would improve profitability and enable Aviva Investors to continue to invest in the development of its global infrastructure”.

Mr Dromer said: “Over the three and a half years since Aviva Investors was created we have taken great steps forward and we are continuing to make strong progress to increase net external sales.

“The Business Review concluded that our strategy is broadly right but, faced with a tougher external environment and at the same time wanting to continue to invest for the future success of the business, we propose to reduce our cost base by focusing on our main strengths – Fixed Income, Real Estate and Multi-Asset Solutions for institutional clients.

“We continue to enjoy a close and mutually reinforcing relationship with our Aviva parent, which is supportive of the proposals we are announcing today. The changes we are proposing will deliver a stronger, leaner and more focused business, at the heart of which is a firm commitment to meeting our clients’ needs.”