The Lancashire County Pension Fund is investing a further £120m (€155m) in a UK affordable-housing provider.

Heylo Housing, owned by Internos, said the UK pension fund increased its investment in the company to £300m from the £180m first committed in 2014.

Lancashire, which is currently partnering with the London Pensions Fund Authority (LPFA) to launch a £10bn asset pool as part of the UK government’s attempts to increase scale among local authority pension schemes, said the investment would shift from its portfolio into the pool “in due course”. 

As its partnership with LPFA falls below the £25bn asset target set by the government, it is expected to collaborate with Greater Manchester Pension Fund, West Yorkshire Pension Fund and Merseyside Pension Fund, which have joined to form a £35bn partnership. 

Heylo said it has invested more than £60m of the capital to date, with a further £120m committed.

The additional funding, according to Heylo chief executive Nicholas McAlpine-Lee, will support the company’s “continued desire to do all it can to deliver affordable shared-ownership housing to communities across the country”.

A bond issue is expected to raise a further £620m from corporate pension funds.

Heylo, which has approximately 600 affordable homes in 40 local authorities, is aiming to double its portfolio this year.