Aviva Investors recognises investor demand for renewable energy with launch of new fund

Aviva Investors, the global asset management subsidiary of Aviva plc, announced the launch of the Aviva Investors European Renewable Energy Fund that specialises in developing and financing renewable energy infrastructure projects located throughout the European Union. Alain Dromer, chief executive, Aviva Investors today launched the fund at the TBLI (Triple Bottom Line Investment) conference in Amsterdam as part of a package of new Socially Responsible Investment, (SRI), initiatives launched by Aviva Investors.

The new fund aims to capitalise on investor interest and binding targets of the EU to increase sustainable enrgy consumption to 20% from 8.5% by 2020. The fund portfolio will include solar photovoltaic, geothermal, biomass, biogas and wind assets. The geographic focus will be across the European Union, primarily in the more mature markets but also in member countries which have relatively immature renewable energy production capabilities.

The EU has been at the forefront of renewable energy reform attracting the largest amount of new investment in the renewable energy sector (€55.8bn in 2007). The expanding European market offers the Aviva Investors European Renewable Energy Fund the opportunity to diversify by country and sector, reducing the concentration risk to any one geography or technology.

The projects will be managed by SachsenFonds Group, one of Germany's leading renewable energy investment specialists and the developer of the world's largest solar energy farm in Brandis, Germany. SachsenFonds has more than €300m of renewable energy projects under management and an eight year track record in the renewable energy sector. Aviva Investors and SachsenFonds have a long-standing relationship and successful history of combining their respective expertise in real estate, fund management and asset procurement to complete transactions.

Joel Lindsey, Aviva Investors fund manager, said: "Our new fund combines Aviva Investors pedigree in fund and asset management and SRI expertise with the excellent track record of SachsenFonds in the renewable energy sector.  Renewable energy projects which significantly reduce carbon emissions provide investment opportunities underpinned by solid market fundamentals and aims to deliver attractive performance.

"Just as importantly, more and more institutional investors such as pension funds are adopting sustainable investment policies that look for opportunities such as this fund."

The Aviva Investors European Renewable Energy Fund will be set up as a Luxembourg regulated specialised investment fund, structured as a SICAV and available to institutional investors. Its constitutive documents have been submitted to the Luxembourg supervisory authority.

Key features of the fund:

• Luxembourg SICAV-SIF with 10 year term
• Target initial gross assets of at least €500m
• Target gross equity IRR range of 10-12% pa with forecast distribution yield in excess of 6% paid quarterly
• Investment in biomass, biogas, geothermal, solar and wind projects across the EU
• Highly experienced fund and asset management teams.