Aviva 2013 Annual Report Download - page 174

Aviva plc
Annual report and accounts 2013
172
Notes to the consolidated financial statements continued
26 – Interests in structured entities continued
(b) Interests in unconsolidated structured entities
As part of its investment activities, the Group invests in unconsolidated structured entities. As at 31 December 2013, the Group’s
total interest in unconsolidated structured entities was £26,474 million on the Group’s statement of financial position, which are
classified as financial investments held at fair value through profit or loss.
The Group does not sponsor any of the unconsolidated structured entities.
As at 31 December 2013, a summary of the Group’s interest in unconsolidated structured entities is as follows:
Interest in,
and loans to,
joint
ventures
£m
Interest in,
and loans to
associates
£m
Financial
investments
£m
Total
assets
£m
Debt securities1 — — 2,122 2,122
A
nalysed as:
RMBS — — 152 152
CMBS — — 336 336
ABS — — 682 682
CDO (including CLO) — — 444 444
ABCP — — 34 34
Wrapped credit — — 474 474
Investment funds2 — — 13,283 13,283
A
nalysed as:
Hedge funds — — 1,034 1,034
Liquidity funds — — 54 54
Private equity funds — — 981 981
Unit trusts — — 11,214 11,214
Specialised investment vehicles2 917 84 10,068 11,069
A
nalysed as:
OEICs — — 1,683 1,683
PLPs 917 84 986 1,987
SICAVs — — 3,966 3,966
FCPs — — 3,312 3,312
SPVs — — 121 121
Total 917 84 25,473 26,474
1 Reported within ‘Other’ debt securities in Note 27a).
2 Reported within ‘Other investments’ in Note 27a).
The Group’s maximum exposure to loss to the interests presented above is the carrying amount of the Group’s investments.
The majority of debt securities above are investment grade securities held by the UK business. Based on the different structures
of the securities, in some cases the Group may be required to absorb losses from an unconsolidated structured entity before other
parties. Those cases occur when and if Aviva’s interest is more subordinated with respect to other owners of the same security.
With regard to unconsolidated PLPs, the Group has provided a guarantee to a property management company to fund its
future development. The amount provided is £66 million and the intention is for the Group to provide an additional £10 million.
As at 31 December 2013, the Group has granted loans to PLPs classified as joint ventures and associates for a total of £29 million.
This amount has been provided for the purpose of short term liquidly funding. For commitments to property management joint
ventures, please refer to Note 19.
In relation to risk management, disclosures on debt securities and investment vehicles are given in note 58 b) iii).
The Group has not provided any other financial or other support in addition to that described above as at the reporting date,
and there are no intentions to provide support in relation to any other unconsolidated structured entities in the foreseeable future.
In relation to other guarantees and commitments that the Group usually provides in the course of its business, please refer to
Note 53 (f) ‘Contingent liabilities and other risk factors’.
(c) Other interests in unconsolidated structured entities
The Group receives management fees and other fees in respect of its asset management businesses. The Group does not sponsor
any of the funds or investment vehicles from which it receives fees. Management fees received for investments that the Group
manages but does not have a holding in also represent an interest in unconsolidated structured entities. As these investments are
not held by the Group, the investment risk is borne by the external investors and therefore the Group’s maximum exposure to loss
relates to future management fees. The table below shows the assets under management of entities that the Group manages but
does not have a holding in and the fees earned from those entities.
31 December 2013
Assets Under
Management
£m
Investment
Management
Fees
£m
Investment funds1 23,730 94
Specialised investment vehicles: 1,496 9
A
nalysed as:
OEICs 200 3
PLPs 1,196 5
SICAVS 2 —
FCP 98 1
Total 25,226 103
1 Investment funds relate to the Group’s US external mutual funds management business and the Spanish and Polish pension funds.