Aviva 2005 Annual Report Download - page 33

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Business review
Aviva plc 2005
Funds under management £bn
£317bn
2001 209
2002 208
2003 240
2004 280
2005 317
France
Aviva Gestion d’Actifs is widely recognised in the French market
as a leading asset manager. At the end of December 2005,
94% of our managed funds were ranked in the top half for returns
over five years. Our continued strong performance was recognised
through a number of awards. For the second year running we
were named best provider of an extended fund range over one,
three and five years by La Tribune/Standard & Poor’s, and as the
best performing insurer in the 2005 fund management awards
by Le Revenu, a leading French investment magazine. Additionally,
we were the only fund manager to win two group categories in
the Lipper Fund Awards 2005.
We have £46.2 billion of funds under management, mostly
on behalf of group companies, including the non-linked funds
of Crédit du Nord. Operating profit was £26 million (2004:
£15 million), reflecting strongly performing equity markets
and new business inflows.
Other Europe and International
Our other Europe and International fund management businesses
consist primarily of Navigator, operating in Australia and Singapore,
and small fund management operations in Poland and Canada.
In Australia, Navigator is one of the top 10 investment
administration services. We offer full-service and low-cost platforms
that give customers access to various wealth-creation and post-
retirement products. We seek to differentiate ourselves through
superior service, leading product features, adviser tools and
integrated infrastructure. We are recognised by financial advisers
for the quality of our product. The Australian financial services
market is one of the fastest growing in the world and we are
well placed to take advantage of this expanding market.
In Singapore, Navigator is a fund supermarket that allows
customers to buy and sell a range of mutual funds from different
fund managers through one product wrapper. The business has
grown substantially during 2005 through developing stronger
relationships with key brokers and by increasing the number of
funds offered.
Our other Europe and International businesses reported operating
profits of £9 million (2004: £9 million). New business sales through
Navigator grew 37% to £938 million (2004: £661 million). In this
total, sales in Australia increased by 26% to £848 million (2004:
£648 million), benefiting from continuing improvements in product
offerings and customer service. Singapore reported significantly
higher sales of £90 million (2004: £13 million) reflecting strong
distribution relationships with key brokers and an increased
fund choice.
Investing in property
Morley’s property business
Morley Property is a mature, profitable business with a strong
growth record. Five years ago, our property team managed
£7.6 billion in property assets, including just £300 to £400 million
in external assets. Today we are the largest property fund manager
in the UK and one of the largest in Europe, with a team of over
100 people managing more than £22 billion, including £10 billion
in external assets. In the same period, the number of specialist
property funds we manage has grown from six to twenty.
Independent research undertaken by industry body Investment
Property Databank shows, over the last three years, that Morley
has enjoyed the highest rate of growth in property funds under
management in the UK.
The business model we put in place has been vital to our
efficiency and success. We decided to focus on what we're good
at – active property fund management – and work with property
partners who are specialists in their chosen sectors. Subsequently
we have delivered one of the most comprehensive ranges of
innovative property products in the market, for example:
– The first, and now largest, retail property unit trust in the UK –
the Norwich Property Trust which is over £2 billion in size
– The first specialist healthcare fund – Quercus Healthcare
Property Partnership
– The first student accommodation fund – the Beach Student
Accommodation Fund
– The first Central European multi-let industrial fund –
the Central European Industrial Fund.
Our growing size has worked to our clients' advantage and
has given us reach and the ability to deliver significant deals.
The Airport Property Partnership, the £800 million joint venture with
BAA that we announced in February 2005, is a good example.
So where next for Morley property?
We still think there are some exciting opportunities – continued
innovation in specialist property funds and the advent of real
estate investment trusts in the UK to name a few. We are aiming
to grow over the next three years across our retail, specialist fund
and institutional business. We also have ambitious plans in
Europe and we've made a promising start, building our team
and launching five products in just over a year. Investors have
a growing appetite for European property and Morley is set to
meet that demand. So far countries in which Morley has invested
include Spain, Italy, Portugal, Poland, Czech Republic, Hungary,
Slovakia, Slovenia, Croatia, Bulgaria and Romania.