Eight UK local government pension schemes (LGPS) in the Midlands are investing £58m (€66.2m) in the UK care home sector via an Octopus Capital-managed fund.
LGPS Central (LGPSC), acting on behalf of the pension funds, committed the capital to the Octopus Healthcare Fund, which raised just under £60m, including capital secured from Knight Frank Investment Management.
The Octopus Healthcare Fund now has £1.7bn in total funds under management, overseeing a portfolio of more than 100 purpose-built homes which provide over 7,500 care beds.
LGPSC is the investment manager of LGPS funds of Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands and Worcestershire.
Mike Hardwick, investment director for property at LGPS Central, said: “Our investment in the Octopus Healthcare Fund aligns with our objective to deliver resilient, inflation-linked income for our partner funds while contributing to critical social infrastructure across the UK.
“The fund’s focus on quality care provision, strong responsible investment integration and stewardship approach made this a compelling opportunity for LGPS Central.”
Michael Toft, head of care homes at Octopus Capital, said: “The UK continues to face an undersupply of quality care homes whilst demand continues to grow with our ageing population. By leveraging our expertise and importantly with this new injection of capital, we can create more care homes to help meet this urgent need.”
Sian Roberts, head of UK institutional sales at Octopus Investments, said: “It is great to see how the Octopus Healthcare Fund is now backed by a growing group of institutional investors seeking resilient income and attractive, risk-adjusted returns aligned with environmental and social outcomes. In particular, we’re really pleased to see more LGPS pool capital come into the fund, as they begin to execute on their ‘fit for the future’ proposals.
“We know that these pools are increasingly looking to invest in local growth and social infrastructure, so we look forward to facilitating that through both our existing suite of products, and through creating tailor-made private market solutions.”
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