- Aegon, a founding signatory of the 2023 Mansion House Compact, announces plans to strengthen its largest workplace default fund, the £12 billion Universal Balanced Collection fund, with new private market investment and enhanced ESG integration.
- Over 700,000 members will be first to access these enhanced capabilities, with future plans to extend availability across the wider Aegon workplace offering.
- The changes aim to improve risk-adjusted returns, enhance diversification and provide access to innovative investment opportunities, in areas that have historically been harder for workplace savers to access.
- These changes further support Aegon’s net-zero journey for its workplace default fund range¹ by driving decarbonisation and investing in innovative private market climate solutions.
Aegon has announced plans to significantly evolve its largest workplace default, the £12 billion Universal Balanced Collection fund, introducing innovative private market investment and enhanced environmental, social and governance (ESG) integration.
The transformation, which will take place from quarter three 2024, targets improved outcomes for over 700,000 members currently invested in the fund and aims to provide better risk-adjusted returns and value for money, offering access to a wider range of responsible investment opportunities.
The Universal Balanced Collection fund is available to Aegon Retirement Choices and One Retirement investors, as well as some off-platform products. Aegon will partner with three leading fund managers to provide a bespoke solution, for use within the Universal Balanced Collection, leveraging their dedicated, specialised expertise and resource.
BlackRock will manage a bespoke, diversified alternative private markets strategy, including private equity, private debt, real estate and infrastructure. It will also manage a fully ESG integrated passive equities and bonds strategy with a year-on-year decarbonisation target, from quarter four 2024.
Aegon Asset Management will manage a new multi asset credit mandate which includes global high yield, asset backed securities and emerging market debt strategies from H2 2024. In addition, they will also manage a private debt and alternative fixed income fund, subject to FCA approval and operational considerations, from early 2025.
Also in early 2025, subject to FCA approval and operational considerations, J.P. Morgan Asset Management will manage a bespoke strategy, offering exposure to private equity, infrastructure and forestry.
The proposal is to house the private market allocations within Long-Term Asset Fund (LTAF) structures, subject to regulatory approval. LTAF is a type of open-ended pooled fund, authorised and regulated by the FCA, that aims to invest efficiently in long-term illiquid assets.
Carne Group, a provider of fund regulation and governance solutions for the asset management industry, will be acting as the Authorised Corporate Director (ACD) of the Aegon Asset Management and J.P. Morgan Asset Management LTAF’s.
The fund objective and risk appetite of UBC will remain unchanged. The fund charge¹ is made up of a fixed management fee and additional expenses, the fixed management fee will not change, although an increase to additional expenses is expected.
Lorna Blyth, Managing Director, Investment Proposition, states:
“We believe our changes will improve the growth potential of the Universal Balanced Collection and future Aegon funds that utilise these enhanced capabilities. The changes target robust risk management and diversification, to offer members improved outcomes and value for money.”
“This bold move also aligns with our commitment to reach net-zero greenhouse gas emissions for our full range of default funds by 2050, and to a 50% reduction in emissions by 2030². It also significantly supports our desire to invest £500 million in climate solutions by 2026; investments that directly contribute to climate change mitigation and/or adaption. We expect many of these solutions to come from unlisted equities which aligns with our Mansion House Compact aim to invest at least 5% of our default fund assets in unlisted equities by 2030.”
"On completion of the Universal Balanced Collection changes in 2025, we anticipate that we will have moved over £30 billion of default assets into funds that consider ESG factors.”³
In future, these enhanced capabilities will provide members across Aegon’s wider workplace default range with access to such innovative investment opportunities.
- Where the fund is purchased within our off-platform products, fund, product charges and expenses are bundled to form the total charge. Fund and product charges will remain unchanged, although an increase to additional fund expenses is expected.
- Measured using carbon footprint across our full range of default funds. Emissions targets don't apply to individual funds. 2030 target applies to scope 1 and 2 emissions from listed equities (shares) and corporate fixed income (bonds) only.
- Since 2020.
About Aegon
In the UK, Aegon offers pension and investment solutions to over 4 million customers. Aegon employs over 2,000 people in the UK and together with around 500 people employed by Atos, we serve the needs of our customers. Figures correct as at 31/12/2023. More information on aegon.co.uk
Aegon UK is part of the wider Aegon Group, based in the Netherlands, whose roots go back to the first half of the nineteenth century. Aegon is an international financial services holding company. Aegon’s ambition is to build leading businesses that offer their customers investment, protection and retirement solutions. Its portfolio of businesses includes fully owned subsidiaries in the US, UK and a global asset manager. In addition, Aegon has partnerships in Spain & Portugal, Brazil, and China, which create value by combining strong local partners with Aegon’s international expertise. In the Netherlands, Aegon generates value via a strategic shareholding in a market leading insurance and pensions company.
Aegon's purpose of helping people live their best lives runs through all its activities. As a leading global investor and employer, Aegon seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com
The information in this press release is intended solely for journalists and shouldn’t be relied upon by any other persons to make financial decisions.