Aegon AM launches new property fund for DC pension investors

5 February 2021

Aegon Asset Management and Mobius Life have launched a version of the Active Beta Property Fund for UK defined-contribution pension schemes, with seed funding from a major UK pension plan.

The Aegon Active Beta Property Fund was launched in 2017 and successfully introduced quasi-passive property investment to UK defined benefit pension schemes. Investment consultants and DC platforms asked Aegon Asset Management to develop a version which would meet the liquidity requirements of the DC pensions market, which led to the development of the Aegon Active Beta DC Property Fund.

Working with their advisers, Lane Clark Peacock (LCP), a major UK corporate DC pension plan has seeded the new Fund, which is available as a pooled pension fund through Mobius Life.

Tony Yu, Manager of the Aegon Active Beta DC Property Fund

Commenting on the launch, Tony Yu, Manager of the Aegon Active Beta DC Property Fund, said: “Just one-third of DC pension schemes invest in commercial property, compared to two-thirds of DB schemes. Challenges around liquidity, fund switching costs and portfolio diversification have hindered higher allocations to commercial property from DC schemes. The new Aegon Active Beta DC Property Fund looks to address these issues, with the aim of providing long-term exposure to the UK property market with daily liquidity and returns in line with the index of balanced funds.”

Stephen Budge, Head of DC Investment Strategy at LCP

Stephen Budge, Head of DC Investment Strategy at LCP, said: “Property has historically delivered attractive returns with relatively low correlations to other assets, so has an important role to play for pension schemes. We were attracted to the simplicity of the Active Beta approach, how it manages manager risk, and the track record of the strategy.”

Adrian Swales, Chief Executive Officer, Mobius Life

Adrian Swales, Chief Executive Officer, Mobius Life said: We are delighted Aegon Asset Management has partnered with Mobius Life to launch the Active Beta DC Property Fund. We are seeing increased interest in our capability to manufacture products for international asset managers. The flexibility of the Mobius Life platform allows innovated products to be offered to the DC pension market.

Source: Aegon AM