“The decision follows the ‘Mansion House Compact’ announcement made by the UK Government in July 2023, outlining a series of proposals to unlock investment into emerging industries, including unlisted companies, and support growth across the wider economy,” said Aviva Investors.

“It also comes as Aviva Investors continues to expand its Private Markets offering to meet the evolving demands of investors, particularly DC pension funds, which have historically not been able to access – or allocate to – private markets investments in a way which can optimise long-term investment outcomes.

“It follows the launch of two Long Term Asset Funds; the £1.6 billion Real Estate Active LTAF (REALTAF) in May 2023, which was the largest LTAF brought to market at the time of its launch; and the conversion of the Aviva Investors Climate Transition Real Assets Fund to sit under the new LTAF regime. The two funds together account for more than £2 billion in assets under management.”

Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with £234 billion in assets under management.

The new dedicated “VC and Strategic Capital” investment desk will be created through the migration of the Aviva Ventures investment team to sit within Aviva Investors’ Private Markets function, which already manages over £40 billion in assets under management.

Led by Ben Luckett, Managing Director, VC and Strategic Capital, the Aviva Investors VC and Strategic Capital team has already managed VC investments on behalf of Aviva’s balance sheet for over 10 years and currently oversees commitments in excess of £450 million.

It will initially comprise five full-time employees who move across from their existing roles.

Aviva Investors CEO Mark Versey said: “This is a terrific example of Aviva Investors in growth mode. Private Markets assets today are severely underrepresented in the portfolios of UK DC pension funds relative to global peers.

“Driven by the UK’s supportive policy environment, which is epitomised by the Mansion House Compact, the scale of the potential investment opportunity is significant.

“With two LTAFs already in the market we are actively looking at how to give clients suitable access to the full breadth of benefits that Private Markets can offer, including unlisted equities. I am delighted to see our continued ability to innovate and grow.”

Jill Barber, Chief Distribution Officer at Aviva Investors, added: “The creation of a dedicated Venture Capital investment capability will enable our clients to access some of the most exciting and dynamic growth areas in the economy.

“We believe the potential returns are attractive and the addition of this investment team means we can continue to meet our clients’ increasing demand for exposure to opportunities across Private Markets.”