Aegon has announced plans to introduce enhanced environmental, social and governance (ESG) integration and private-market investment into its largest workplace default fund.
Changes to the £12bn Universal Balanced Collection Fund will take place from Q3 2024, with the aim of improved outcomes for over 700,000 members invested in it.
This move also aims “to provide better risk-adjusted returns and value for money, offering access to a wider range of responsible investment opportunities”.
The fund is available to Aegon Retirement Choices and One Retirement investors, as well as certain off-platform products.
Aegon has partnered with BlackRock and JP Morgan Asset Management (JPMAM) to provide a bespoke solution for use within the fund.
BlackRock will manage a diversified alternative private markets strategy, including private equity, private debt, real estate and infrastructure.
It will also manage a fully ESG integrated passive equities and bonds strategy, with a year-on-year decarbonisation target, from Q4 2024.
JPMAM, subject to FCA approval, will manage a bespoke strategy offering exposure to private equity, infrastructure and forestry from early 2025.
Additionally, Aegon Asset Management will manage a new multi-asset credit mandate, which includes global high yield, asset-backed securities and emerging market-debt strategies from H2 2024.
The plan is to “to house the private-market allocations within Long-Term Asset Fund (LTAF) structures, subject to regulatory approval”.
The LTAF is a category of open-ended authorised fund designed to invest efficiently in long-term assets – with the first being launched in March 2023.
Carne Group, a provider of fund regulation and governance solutions for the asset-management industry, will be acting as the Authorised Corporate Director (ACD) of the Aegon Asset Management and JPMAM LTAF’s.
The fund charge is made up of a fixed-management fee and additional expenses. The fixed-management fee will not change, although an increase to additional expenses is expected.
Aegon managing director, investment proposition Lorna Blyth said: “We believe our changes will improve the growth potential of the Universal Balanced Collection and future Aegon funds that utilise these enhanced capabilities.
“The changes target robust risk management and diversification, to offer members improved outcomes and value for money.
“This bold move also aligns with our commitment to reach net-zero greenhouse gas emissions for our full range of default funds by 2050, and to a 50% reduction in emissions by 2030.
“It also significantly supports our desire to invest £500m in climate solutions by 2026; investments that directly contribute to climate-change mitigation and/or adaption.”
She added that, on completion of the changes in 2025, “we anticipate that we will have moved over £30bn of default assets into funds that consider ESG factors”.
can we have the fund sedol number,,,, please
According to The Economist Global investors a have withdrawn $40 billion from ESG funds. Is Aegon trying to emulate King Canute? It seems that a fair few investors are coming to their senses and have come to realise that investing is about making money, not trying to change the world. Provided you invest in a regulated & legal market you should be perfectly free to invest where you like, without the interference of regulators or woke fund managers.