Henley Investment Management has secured two UK local government pension schemes (LGPS) as seed investors in its second fund focusing on social housing.

The London-based fund manager hopes to raise £300m (€350m) by the end of this year for the Henley Secure Income Property Unit Trust II (SIPUT II) fund and is targeting a £1bn fundraise over the next three years for the open-ended fund. The two LPGS are investing £55m in the fund.

Henley aims to deliver a total return of 6-7% via SIPUT II. The fund will invest in new and existing social housing developments providing homes for people with mental health conditions, learning disabilities and victims of domestic violence.

Each property will have a long-term, index-linked lease in place to provide a secure income stream for investors, the manager said.

Following the success of Henley’s SIPUT I, which invested £450m in housing for more than 2,100 vulnerable residents, Henley SIPUT II will aim to provide at least 1,000 homes for those in need across all regions in the UK.

Stuart Savidge, fund managing director at Henley Investment Management, said: “SIPUT II will provide secure accommodation for some of the most vulnerable people in society and at the same time generate a strong, inflation-linked income stream for investors.

“We only see an increase in demand from the public sector for this type of accommodation and bringing additional capital to a world which sees individuals suffering the indignity of living in appropriate accommodation is highly beneficial to society as well.”

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