ACCESS Pool, which manages £45bn (€53.5bn) of UK local government pension schemes (LGPS) assets, has committed £125m to a new UK affordable housing investment strategy managed by Legal & General (L&G).
The LGPS pool is investing in the L&G Affordable Housing Fund, a new fund created to invest in “well-designed, purpose-built affordable rent and shared ownership housing in areas of acute need and demand across England whilst aiming to deliver a diversified inflation-linked cash flow for investors”, according to L&G.
It said the fund, which has a pipeline of new homes via its affordable homes business Legal & General Affordable Homes, will hold over 750 homes at launch.
António Simões, group CEO at Legal & General, said: “Today’s launch is an important step forward in putting pensions capital to work by investing in tangible assets that can help benefit the real economy and enhance local communities. With acute demand for affordable housing across the UK, the public and private sector need to work together to drive change.
“This fund builds on L&G’s ambition to scale our private markets platform and catalyse our own balance sheet investments by offering our clients new investment opportunities that aim to deliver compelling financial returns whilst tackling real-world challenges.”
Councillor Mark Kemp-Gee, chairman of the ACCESS joint committee, said: “This allocation marks yet another key step in our initiative to diversify into the private markets. We have been impressed with L&G’s history of delivery in the affordable housing space over a long period and believe this investment partnership will provide robust, stable, long-term financial returns for our members alongside meaningful social benefits.”
Ali Farrell, fund manager at L&G’s asset management arm, said: “We are thrilled that Access have committed £125m which will directly increase the supply of affordable homes. With traditional housing associations facing financial pressures, institutional investors, like Access, are proving themselves as reliable partners in directing long-term pensions capital into areas that support society by unlocking more homes.
“With proven investment expertise, having invested client capital into the real estate sector for more than 50 years, we are excited to continue playing our part and look forward to welcoming new partners; the fund is a prime example of how we bring the best of L&G’s catalytic balance sheet capital to the fore, for third-party clients.”
Simon Century, managing director of housing at L&G’s asset business, said: “We are uniquely placed to tackle the current housing crisis and deliver more affordable homes, given our expertise across fund management all the way through to the development and operations of assets.
“Having created assets for our own annuity division, we are delighted that Access have chosen us as their partner supporting our belief that institutional investment can play a role in directly benefitting people.”
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