Internos Global Investors is partnering a UK housing provider as it looks to attract institutional capital into the UK private rented sector (PRS).
The fund manager has entered a joint venture with Catalyst for Homes (C4H) to offer direct and indirect investment vehicles to institutions.
Internos said the joint venture was evaluating 152 residential development sites across greater London, with a view to selecting “the most attractive for the institutional market”.
The firm said suitable sites would need to provide asset management potential and up to 30-year income returns.
Investments, it added, could attract allocations from “not only real estate but also infrastructure and fixed income quotas”.
Andrew Taylor, Internos head of UK residential investment, said the disparity between private amateur landlords and institutional investors was a motivating factor behind the firm’s decision to partner C4H.
Citing Investment Property Forum research, Taylor said only 2% – or £18bn (€24bn) – of the £837bn sector was currently in the hands of institutional investors.
“This disparity provides a significant opportunity to grow institutional investment with professional management in this previously overlooked market,” Taylor said.
“Couple this with a worrying outlook for global equity and fixed income returns, and the UK residential market provides an attractive proposition for risk-averse or return-hungry investors.”
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