Worcestershire County Council Pension Fund has committed £20 million to the AEW UK Real Returns fund, which provides a long-dated, inflation-linked income through investment in property sectors which provide sustainable income backed by long leases.
The AEW fund now has a fund size of £86 million. It aims to match the benefits of property to the liabilities of pension funds and long-term investors. The fund targets a real total return of 4% and made a nominal total return of 9.9% for the 12 months to the end of September 2017. Ian Mason, portfolio manager at AEW UK Real Return Fund, commented: “We are delighted to have received this endorsement from Worcestershire County Council, which demonstrates the appeal of our innovative real estate strategy. We have already put much of this additional capital to work and see a positive pipeline in a diverse range of property sectors including care homes, leisure and car showrooms, as well as the traditional sectors.”
Worcestershire County Council finance manager, Mark Forrester, said: “We have been impressed with the AEW team’s track record and performance-driven strategy in deciding where to make our allocation. We have been looking to reposition the Worcestershire County Council Pension Fund into real assets and the AEW UK Real Return Fund seemed a natural fit for our investment approach.”