London CIV, the investment pool representing 32 UK local government pension schemes (LGPS), has committed £100m (€120m) to Legal & General’s (L&G) UK affordable housing investment strategy.
L&G said the capital from London CIV forms part of an additional £130m raised in a second close for its Affordable Housing Fund, which also welcomed other investors, including social impact investor Better Society Capital.
L&G said ACCESS Pool, the manager of the LGPS collaboration of Central, Eastern and Southern Shires, has also invested a further £20m in addition to a previous allocation in 2024. As previously reported, Greater Manchester Pension Fund also committed to the fund.
Launched in July 2024, the Affordable Housing Fund has now raised £510m, which is expected to deliver approximately 3,500-4,000 homes, L&G said.
L&G said it has seeded the fund with 514 homes and exchanged contracts on three additional funding opportunities to further affordable housing development, adding that the current pipeline is expected to deliver over 1,000 operational or under-construction homes by the second quarter of 2025.
Ali Farrell, asset management fund manager at L&G, said: “The level of interest we have seen in this fund since its inception last year is a testament to the attractive proposition that investors see in contributing to much-needed affordable housing in the UK, while seeking steady inflation-linked returns and positive social impact.
“I am pleased to welcome our new partners as we leverage our sector-leading platform to execute our strategy and deliver high-quality housing in areas of acute need.”
Christopher Osborne, the head of real estate at London CIV, said: “Through our LCIV UK Housing Fund, London CIV’s strategy is to help increase the supply of good-quality affordable housing in the UK, address an under-served part of the market, and deliver income-driven returns to our partner funds.
“We’re delighted to have committed capital into L&G Affordable Housing Fund and to partner with an established manager and platform within the sector. We consider this strategy will both meet our target returns and contribute to providing more affordable homes in the UK.”
Drew Ritchie, investment director, Better Society Capital, said: “L&G will play a leading role in channelling private capital into affordable housing in the coming years, delivering thousands of vital homes for families in need throughout the UK.
“We’ve relished the opportunity to participate as a challenger and endorser of the fund’s intended social impact. As a market shaper, L&G can visibly evidence that private capital can be a long-term, sustainable, impact-driven funder of affordable housing.”
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