Allianz Global Investors (AllianzGI) has created an equity housing fund to offer UK pension funds inflation-linked yields.
AllianzGI’s Home Equity Income Strategy plans to raise an undisclosed amount of capital from its institutional clients to support the launch of Wayhome, a form of gradual homeownership without a mortgage in the UK.
The manager said the capital raised from investors will allow Wayhome to acquire homes with aspiring homeowners who are unable to purchase their own home through traditional ways of buying a home.
Wayhome’s model enables customers to part-own, part-rent a property. Customers can purchase with as little as 5% deposit, and then rent the rest. They can then buy more of the property, reducing their rent, whenever they want.
The manager said the partnership with Wayhome will open up a new market for institutional investors, “one that aims to offer reliable, inflation-linked yields that suit the cash-flow profiles of defined benefit pension funds, whilst helping more aspiring homeowners get on the property ladder”.
Irshaad Ahmad, head of European institutional at Allianz Global Investors, said: ”We did it with infrastructure debt and now we plan to do it again through Wayhome’s gradual homeownership model.
”We continue to see significant institutional investor demand for the type of cash-flow matching that this partnership with Wayhome is set to provide.”
Hugh Boyle, CEO Wayhome, said: “Our partnership with AllianzGI means ‘reluctant renters’ – those who would prefer to own their own home - will soon have a new way to homeownership, without a mortgage.
“AllianzGI’s involvement will help us unlock the institutional financing we need, to open a path to homeownership for hard-working families, like those currently paying off somebody else’s mortgage.”
A previous version of this story incorrectly referred to the Home Equity Income Strategy as an equity loan-style UK housing fund