Devon council commits £40m to Aviva infrastructure funds

The UK investor, which doubled its target allocation to the asset class last June, is the first local pension to back the asset manager’s REaLM strategies.

Devon County Council Pension Fund has committed £40 million (€48 million; $65 million) to Aviva Investors’ Returns Enhancing and Liability Matching (REaLM) strategies.

The pledge was first announced in September last year, as reported by Infrastructure Investor Research & Analytics. Half of the investment has been committed to the REaLM Infrastructure Fund, and the other half to the REaLM Ground Rents Fund.

This makes Devon Council the first local authority pension scheme to invest in the REaLM infrastructure vehicle, which focuses on a range of projects across the UK. The REaLM suite of funds currently has combined commitments and assets under management of £1.6 billion, with the infrastructure vehicle comprising £396 million of the total.

“Inflation is one of the key risks faced by pension funds. The Devon Pension Fund’s investment in the Aviva Investors REaLM funds will provide protection against UK inflation, whilst offering diversification at relatively low risk,” said Mark Gayler, assistant country treasurer at Devon County Council, in a statement.

The move is in line with Devon Council’s expressed intent to increase its exposure to the asset class. Last June, the pension raised its target allocation to infrastructure from 2 percent to 4 percent. In September, in addition to approving an investment in Aviva’s REaLM funds, it announced a £45 million commitment to First State’s €1.28 billion European Diversified Infrastructure Fund.