Aviva Investors' employees face 90-day wait for job clarity

Staff at Aviva Investors face a wait of up to 90 days before more clarity is given on jobs, following yesterday's announcement by the group that it plans to scrap four equity desks in London.

Aviva Investors said yesterday it planned to close its European, emerging market, SRI and global equity desks as part of a shake-up that will see 160 roles cut if the changes are approved.

Simon Clark, head of wealth management at the group, said today there would be more news on jobs after a consultation period.

"Those employees who are at risk face a 90 day consultation period. We will be able to reveal more after," he said.

Investment Week understands Aviva Investors has informed fund buyers that although the four equity desks are set to be closed, the funds under their remit will remain in existence but will be run out of its regional offices rather than the UK.

However, whether or not these funds will be run by their current managers is not confirmed.

Aviva Investors has a number of funds focused on European and emerging markets equities, including the £140m European Equity fund run by John Botham, and its £98m SF European fund run by Neil Brown.

The group has said it intends to re-focus the business on its fixed income, property and multi-asset arms.

It is taking action following a decline in profits at the business, with Aviva Investors accounting for £97m, or just 4%, of the insurer's £2.55bn operating profit in 2010 - down from £115m a year earlier.

The move has shocked advisers, who said there had been little contact with the company's sales people in recent months.

Darius McDermott, managing director at Chelsea Financial Services, said his contact with the company was limited, and he had not been contacted prior to the announcement yesterday. He warned investors who held Aviva's funds to tread carefully.

"It is almost certain there will be some fund mergers and changes ahead," he said.

"If I had owned one of these funds [emerging market, global, European and SRI] I would definitely sell, but if it become more clear the direction they were going in then I would hold."

One anonymous adviser said he had received a circular reassuring clients the company was not reducing its UK retail presence, contrary to some media reports.

Meanwhile Ben Willis, head of research at Bristol-based Whitechurch Securities, said there is a possibility Aviva Investors' equity funds are sold to another investment company looking to buy existing assets.

"Aviva may look to merge these assets but this would mean convincing existing investors to merge into funds investing in different asset classes, with different risk profiles and objectives," he said.

"Possibly they will provide investors the option to merge into another fund of the nearest fit, but another fund group could buy the offering," he said.

Aviva Investors said the restructure was caused by the economic downturn, which it said had led to a "reduced appetite for riskier assets such as equities, notably in Europe".

The group also said it was proposing to focus sales and marketing activity on key institutional markets.

It announced plans to establish a fresh Global Responsible Investment team covering all assets under management.

Today in a statement Aviva Investors added: "Further to yesterday's announcement on Aviva Investors' business review proposals we would like to clarify our position with regards to the UK retail market.

"Aviva Investors remains committed to supporting and aligning its investment management activities to the needs of Aviva Group Companies and in particular UK retail.

"While Aviva Investors proposes to shift emphasis of its external market engagement to focus on institutional clients it will continue to provide investment management support to meet the needs of Aviva's UK retail funds such as OEICs, Life and Pension Funds."