Aviva share price: Asset management arm offloads Kentucky business

on Mar 28, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Friday, March 28: Aviva Plc’s (LON:AV) asset management business has agreed to sell Kentucky-based equity manager River Road Asset Management. Today’s sale announcement came after earlier this week the FTSE 100 company agreed to divest its Turkish insurance arm Aviva Sigorta A.Ş as part of its strategy to offload non-core businesses.

Aviva’s share price has lost more than three percent in London trading this morning.
**Aviva announces River Road sale**
Aviva said in a statement today that its asset management business Aviva Investors had agreed to sell US equity manager River Road to Massachusetts-based Affiliated Managers Group, Inc (NYSE:AMG).
Aviva said that the transaction represented “a modest premium” to group net asset value (NAV) and would increase both the IGD solvency surplus and economic capital surplus by £0.1 billion. The deal, subject to customary consents and approvals, is expected to be completed in the third quarter.

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Aviva noted in the statement that its asset management arm remained committed to the US market and that its Chicago-based Aviva Investors Americas unit was seeing strong growth in cross border sales in product classes such as global high yield and securitised products.
River Road, based in Louisville, Kentucky, had more than $11 billion (£6.6 billion) in assets under management as of December 31, 2013. Aviva bought the company in 2009 as part of its push into the North American market at the time.

Jason Windsor, chief strategy and development officer at Aviva, explained in today’s statement that the River Road sale was “in line with Aviva Investors’ strategy of simplifying its business and moving towards an integrated operating model and organisational structure”, adding that “a boutique US equity manager” did not fit with that strategy.

Earlier this week, Aviva agreed to sell its Turkish general insurance (GI) business Aviva Sigorta to a consortium led by London-based EMF Capital Partners. (Aviva Share Price: Insurer Offloads Turkish Business) The sale, which was for an undisclosed amount, is part of the group’s strategy of exiting non-core operations.

**Deutsche Bank reiterates ‘hold’ rating**
Analysts at Deutsche Bank today reiterated their ‘hold’ rating on Aviva with a price target of 480p. RBC Capital, which rates the FTSE 100 insurer as a ‘sector perform’, last week lowered its price target on the stock from 550p to 500p, while analysts at Canaccord Genuity reaffirmed the company as a ‘buy’ with a price target of 570p.
Aviva currently has a consensus ‘hold’ rating and an average price target of 490.40p.
**As of 08:01 UTC, buy Aviva shares at 473.00p.**
**As of 08:01 UTC, sell Aviva shares at 472.50p.**


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