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Aviva Investors launches European secondary infrastructure credit product

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Aviva Investors has launched the European Secondary Infrastructure Credit SV (Securitisation Vehicle).

 
The SV is the issuer of profit participating notes backed by a portfolio of infrastructure debt.
 
The initial issue of EUR425m has been subscribed by three European insurance companies, including Aviva France.
 
Philippe Gravier (pictured), chief financial officer of Aviva France, says: "It is with great pleasure that we decided to invest in this fund to finance European infrastructure. This fund is not only an investment opportunity for our life insurance portfolio, it also about supporting public utility by investing in the real economy on long-term projects.”
 
The investment strategy will be to acquire bank loans in the secondary market, complemented by selective investments in the primary market. The approach is to focus on operational infrastructure projects, which have historically demonstrated a very low level of credit loss. The vehicle will target core infrastructure assets across Europe taking a low risk approach – public buildings, transport, transmission and distribution, and renewable energy.
 
Laurence Monnier, fund manager, infrastructure at Aviva Investors, says: “Banks have engaged in a huge amount of infrastructure lending over the last 10 years but are now keen to shrink their balance sheets and shorten the duration of their assets. This offers investors the opportunity to access a new class of secure long-term debt at an attractive return. This new product allows investors to diversify their credit portfolio with exposure to senior loans in the infrastructure asset class at a higher yield than available from investment grade corporate credit, yet arguably with lower risk.”
 
Aviva Investors has a track record of managing infrastructure assets for over 10 years and its dedicated team of investment professionals currently manages portfolios of low risk assets in debt, renewable energy and unleveraged strategies in energy and social infrastructure.

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