Focuses on Fixed Income, Real Estate and Multi-Asset Solutions
Sales and marketing focus on institutional market
Aviva Investors, the global asset management business of Aviva, is proposing to streamline its business, leveraging its strengths in key asset classes and prioritising its distribution effort towards the institutional market. The proposed changes follow the conclusion of a comprehensive business review led by Aviva Investors CEO Alain Dromer and endorsed by the Aviva Group Board. 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.
Aviva Investors therefore proposes to streamline its business to concentrate manufacturing activity in Fixed Income, Real Estate and Multi-Asset Solutions, where the business sees growth potential and already has a strong competitive position. In addition the economic downturn has been the catalyst for a change in client behaviour across the asset management sector, with a reduced appetite for riskier assets such as equities, notably in Europe.
As a result Aviva Investors is proposing to reduce the scope of active equity management in London, focusing on the core market in each of its four regions and eliminating duplication by removing London based European, Emerging Markets, Global and Sustainable Responsible Investments (SRI) equity desks. Aviva Investors plans to retain its strong indexing and quant capability, and to have one active portfolio management capability in each of the main markets, retaining all the expertise required for multi asset solutions.
With a majority of its business already coming from institutional clients, Aviva Investors is proposing to focus sales and marketing activity on key institutional markets. This will mean scaling back activities in the Financial Institutions space, except where it is possible to develop and maintain institutional-type relationships.
In addition Aviva Investors proposes to refocus its Environmental, Social and Governance (ESG) investment monitoring activities, establishing a new Global Responsible Investment Team covering all assets under management. This team will maintain Aviva Investors’ advocacy and broader industry initiatives such as its work promoting business ethics, the UN Global Compact and Sustainable Stock Exchanges. As a result of reducing the scope of active equity management it is proposed that there will be a reduction in the stand alone resources allocated to corporate governance. However, Aviva Investors will continue to deliver its commitments to the UN Principles for Responsible Investment and the UK Stewardship Code, and will continue to ensure the integration of material ESG issues into its mainstream assets under management.
Across Aviva Investors’ global operations it is proposed that there will be an overall reduction of around 160 jobs over the course of 2012, representing approximately 12% of Aviva Investors’ global workforce, with the majority of these job reductions coming from London. Aviva Investors will make every effort to support our people through the consultation process and will look to manage the necessary streamlining in our business sensitively, working with staff representative bodies where relevant and the wider Aviva group to minimise the impact on people through redeployment and other measures.
The proposals are being communicated to staff and clients today. They are subject to a period of consultation involving Aviva Investors’ staff bodies in the UK and internationally.
Alain Dromer, chief executive of Aviva Investors, 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.”
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