Aegon plans to “significantly evolve” its largest workplace default fund by introducing private market investment and environmental, social and governance integration.
The transformation of the £12bn Universal Balanced Collection fund, which will take place from Q3 2024, looks to improve outcomes for over 700,000 members currently invested in the fund.
It also aims to provide better risk-adjusted returns and value for money, offering access to a wider range of responsible investment opportunities.
Aegon UK managing director of investment proposition, Lorna Blyth, explained: “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.”
Aegon said the Universal Balanced Collection fund is available to Aegon Retirement Choices and On Retirement investors, as well as some off-platform products.
Aegon will partner with three fund managers to provide a bespoke solution for use within the Universal Balanced Collection.
BlackRock will manage a bespoke, diversified alternative private markets strategy; Aegon Asset Management will manage a new multi-asset credit mandate; and J.P Morgan Asset Management will manage a bespoke strategy.
Aegon said the fund objective and risk appetite of the Universal Balanced Collection fund will remain unchanged.
Net-zero
Blyth added this “bold move” also aligns with Aegon’s commitment to reach net-zero greenhouse gas emissions for its full range of default funds by 2050 anda 50 per cent reduction in emissions by 2030.
“It also significantly supports our desire to invest £500mn in climate solutions by 2026; investments that directly contribute to climate change mitigation and/or adaptation,” she said.
“We expect many of these solutions to come from unlisted equities which aligns with our Mansion House Compact aim to invest at least 5 per cent of our default fund assets in unlisted equities by 2030.
“On completion of the Universal Balanced Collection changes in 2025, we anticipate that we will have moved over £30bn of default assets into funds that consider ESG factors.”
tom.dunstan@ft.com
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