Investment manager M&G has acquired a majority stake in Greencore Construction and has formed a £500m (€582m) co-development venture with the UK housebuilder.

M&G bought the undisclosed majority stake in the sustainable housebuilder on behalf of its policyholders in its £143bn Prudential With Profits Fund.

The equity investment will help Greencore to expand its capacity and increase its impact across the UK.

M&G said it also intends to invest up to half a billion pounds over the next three to five years in sustainable new developments of private and affordable housing, in partnership with Greencore.

The partnership will be led by M&G’s real estate investment team, on behalf of investors in its residential property and shared ownership strategies.

Greencore has developed a method of construction which uses a closed panel timber frame, manufactured off-site and insulated with natural materials such as hemp, lime and wood fibre. The company’s is currently constructing Springfield Meadows, a sustainable housing development in Oxfordshire.

Jack Daniels, M&G’s CIO, said: “The scale, expertise and flexibility we have across our business means we are uniquely positioned to help Greencore transform UK house building to a more sustainable model.

“Our investment will enable thousands of people to live in high quality, comfortable and energy-efficient homes, while also potentially benefitting millions of our customers and policyholders in our With Profits Fund.”

Ian Pritchett, managing director of Greencore Construction, said: “With this investment, Greencore can scale to have a transformational impact on sustainable housebuilding standards in this country.

“The built environment is one of the biggest emitters of carbon, both in construction and occupation, but we’ve shown it doesn’t have to be this way. Our homes are sustainable to build and sustainable to live in, which is becoming more important than ever as energy prices continue to spiral.”

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