Aegon Asset Management and Mobius Life have launched a new real estate fund for U.K. defined contribution (DC) pension investors for easy access to the asset class and alleviate liquidity challenges.
Known as the Aegon Active Beta Property Fund, the seed funding is from an unnamed “major U.K. pension plan”. Initially, the fund made its debut in 2017 and is the new version of the Active Beta Property Fund.
The pooled pension fund focuses on tracking the U.K. commercial property funds market.
In a statement, manager of the fund Tony Yu said that one-third of the DC pension invest in commercial property comparing two-thirds of DB schemes. The challenges involve liquidity, portfolio diversification, and fund switching costs that have impeded higher allocations to commercial property from DC schemes, he added.
The flexibility of the Mobius Life platform makes for the offering of innovative products to the DC pension market, says CEOF of Mobius Life Adrian Swales.
The development of the Aegon Active DC Property Fund was led by DC platforms and investment consultants’ requirements to develop a version that meets the liquidity needs of the DC pensions market.