Aviva 2009 Annual Report Download - page 20

18
Aviva plc Aviva Investors
Annual Report and Accounts 2009
Focused on clients, focused
on performance
Aviva Investors combines the group’s asset
management components into a single, globally
integrated business. We manage internal funds
for Aviva, as well as for a growing range of
institutional and retail third party clients. Our
focus on client service has brought external
recognition and contributed to a strong
performance in 2009.
Strategy
Our core strategic objective is to build our presence as a globally
integrated asset manager and establish Aviva Investors as a
leading player in the market for retirement solutions.
We aim to increase revenues and profitability by delivering
significant growth in higher-margin assets under management
from external clients.
The key strategic imperatives central to our success are:
— our commitment to client focus, delivering investment
solutions that fully meet their requirements
— delivering strong investment performance to underpin
product sales activity
— finalising the roll-out of a global business development
function with a footprint in mature and emerging markets
— a high performance culture that rewards those who make
the strongest contribution to the achievement of our goals
— further increases in business effectiveness and efficiency
through the adoption of global core processes
Market environment
Following a turbulent start to 2009, market conditions improved
with some markets registering their best annual performance
in over 20 years. The pace of any further rally across markets is
likely to be more modest with the uncertainty around central
banks removing stimulus measures. Although some economies
remain in recession, we remain optimistic that recovery will
gather pace.
Performance
IFRS operating profit was in line with the prior year at
£115 million while funds under management increased 6%
to £250 billion as markets recovered. Our financial results
are discussed in more detail on page 48 of this report.
A number of positive trends emerged to support our
strategic objectives in 2009. Our focus on client service gained
us improved rankings in UK-focused independent client
service/investment performance surveys for investment quality.
Investment performance was also an area of strength. Where
clients have specified performance benchmarks, Aviva Investors
has met or exceeded 83% of these over one year and 68%
over three years, with particularly strong performance in France,
Australia and Poland. We also generated record levels of
performance fees.
Our liquidity funds attracted strong inflows in France and
the UK and from our continental European distribution channel
through our SICAV range. In the UK, our Sterling Government
Liquidity and Sterling Liquidity Funds gained Standard & Poor’s
highest possible ‘AAAm’ stability rating.
We have made significant progress in developing a global
marketing, sales and distribution capability, re-engineering our
global business development function to facilitate sales to
external clients and underpin our client-centric approach. This
was enhanced by group-led PR and advertising for the global
rebrand, which helped to cement trust in, and recognition of,
the Aviva name in both established and new markets and by
our own marketing efforts which helped to raise Aviva Investors’
profile in a competitive market.
Aviva Investors also received a number of external accolades
in Austria, Singapore, Australia and the UK. In November we
were proud to work alongside the United Nations for the launch
of their report on ‘sustainable stock exchanges’, a programme
that is continuing in 2010.
Outlook
Since Aviva Investors launched in September 2008 we have
made strong progress. The loss of confidence in financial
markets has meant that clients are increasingly looking for
risk-aware investment options and, as an insurance-owned
asset manager, we are well placed to capitalise on that trend.
We look forward to 2010 with confidence and anticipation.
Listening to our clients
First Securities Investment Trust (FSITC) is a leading asset
manager, marketing investment products to customers in
Taiwan. In 2009, we won a mandate to handle a new global
high yield product through our high yield investment team in
North America. We supported the local Aviva Investors team
in Taiwan and managed FSITC’s successful initial offering.
As a follow-up, we initiated a customer survey to ensure
that issues and insights from FSITC were captured and acted
upon. Despite the significant commercial success of the new
launch the survey uncovered some concerns and a need for
improvement on operations and communications.
We were able to act quickly and decisively to resolve these
concerns. FSITC’s response was very positive: our actions had
shown that we had listened to their feedback at a senior level,
creating a much stronger relationship.
Investors operating profit £m
IFRSMCEV*
09 40
115
08 41
114
07 64
147
06 57
112
05 36
77
* On an MCEV basis from 2007. Prior years presented on an EEV basis.
Funds under management £bn
09 250
08 236
07 235