Willis Towers Watson has launched a fund for institutional investors which is aimed at providing a compelling alternative to index-linked gilts in funding liabilities and enhancing returns.
The new fund, called the Secure Income Fund, provides institutional investors with an inflation-linked cash flow through investments which generate a better risk-adjusted return than investment-grade credit and index-linked gilts.
It encompasses a wide range of strategies across real estate, infrastructure, renewable energy and real asset debt and uses all implementation options including secondaries and co-investments.
Willis Towers Watson has been investing in secure income assets (SIAs) since 2006, and has a 30-strong team identifying the most appropriate opportunities and engaging with skilled managers. SIAs provide an attractive cash flow profile, with an expected long term yield of 4 to 5 per cent a year, while also adding diversification to a portfolio.
Karen Dolenec (pictured), global head of real assets at Willis Towers Watson, says: “With many institutional investors continuing to prioritise inflation-linked income, the real yields available from traditional assets have been squeezed. Clients have been telling us about the challenges which they have faced in establishing a presence in the alternative area of secure income investments. The key benefit of the fund is that it offers a simple solution for individual clients to benefit from our sourcing skills in an attractive but difficult to access opportunity set.
“Our proactive approach and scale have allowed us to develop strong relationships with a substantial manager universe. We often work with members of the manager community to create new products meaning that we are at the forefront of innovation while securing capacity and preferential terms. All of this is in keeping with our objective of ensuring that our clients are able to achieve the best possible outcomes at an appropriate level of risk. If we don’t believe that the most appropriate solution exists, we will create it.”
