The remainder of Aviva Investors’ sustainable and responsible investment (SRI) team is to move to Alliance Trust Investment, which has struck an investment-advisory agreement to manage the insurance giant’s £1.2 billion ($1.9 billion) in SRI funds.

The move follows the announcement, in January, that Aviva Investors would shed 160 positions, or 12% of its staff, and refocus on areas of “competitive strength”, namely fixed income, multi-asset solutions, real estate and core equities. At the time, the company said 10 SRI and corporate governance jobs were at risk.

Five Aviva staff, led by Peter Michaelis, will move to Alliance Trust Investment, owned by investment trust Alliance Trust Plc, and which currently manages £582 million. The five comprise two fund managers, Michaelis and Neil Brown, and three analysts.

“This is a good outcome for our clients and also our business,” said Paul Abberley, interim chief executive of Aviva Investors. “The transfer of our SRI team to Alliance Trust Investments will facilitate a seamless transition of responsibilities and ensure consistency is maintained in the investment process.”

Michaelis told Environmental Finance that Aviva received numerous approaches for its SRI team and assets. “It generated a lot of interest,” he said.

The SRI assets will initially remain with Aviva, although it is anticipated that the seven open-ended investment trusts will be transferred to Alliance Trust next year, while Aviva is “considering the long-term future” of a Luxembourg-domiciled fund, given the more complex regulatory rules that govern it. The funds will be managed with the existing investment strategy.

The team is now in discussions with clients about the transfer of their assets, although Michaelis says he is confident that “the vast majority of our clients will stay with us.”

Alliance Trust does not currently offer any SRI products.

“Securing this highly respected SRI team led by Peter Michaelis underlines our future growth strategy of focusing on global equities and fixed income with an emphasis on specialist investment opportunities,” said Ed Troughton, managing director of Alliance Trust Investments.

Aviva Investors retains a responsible investment capability, with a seven-strong global responsible investment team to embed environmental, social and governance management throughout the business. It is led by Steve Waygood, the company’s chief responsible investment officer.

Colin Purdie, who managed Aviva’s £250 million Sustainable Future Corporate Bond fund, is to remain with Aviva, to manage mainstream bond funds. The management of the SRI bonf fund will be assumed by two Alliance Trust managers, Rod Davidson and Stuart McMasters, said Michaelis.

By Mark Nicholls
Environmental Finance