Samsung Life Insurance, London CIV, Big Society Capital, Schroder BSC Social Impact Trust and Savills PLC have invested £123m (€143.4m) in a UK affordable housing fund managed by Savills Investment Management (IM), marking the fund’s first close.
The founding investors have backed the Savills IM Simply Affordable Homes Limited Partnership which is expected to invest in and manage a diversified portfolio of affordable and social-rent homes as well as shared-ownership homes.
Savills IM said its affordable housing provider Simply Affordable Homes RP will help the open-ended core fund acquire existing “income-producing stock through establishing strategic partnerships” with UK housing associations and other registered providers (RP), freeing up capital for them to develop more homes.
The impact fund will also facilitate the delivery of new homes and through strategic partnerships with developers and housebuilders, the manager added.
Alex Jeffrey, CEO of Savills IM, said: “The UK faces serious housing challenges, especially with regard to affordability, and this fund aims to help address this. Investing in UK affordable housing provides opportunities for institutional capital to meet commitments to socially responsible investing and make a significant and positive impact, whilst achieving attractive returns.”
Dominic Curtis, fund manager and CEO of Simply Affordable Homes RP, said: “Our high-quality RP and investment strategy has attracted some of the industry’s leading figures as directors, including Keith Exford, Ann Santry and Jack Stephen.
“Our sourcing platform has multiple links to the existing sector and through our strategic partnerships with Housing Associations and other private developers, we hope to deliver much needed capital into the sector.”
Christopher Osborne, the head of real estate at London CIV – the asset pooling vehicle for the UK capital’s 32 public pension funds – said: “Following extensive due diligence and negotiations on behalf of our partners funds, we are excited for LCIV UK Housing Fund to partner with Savills IM and be an anchor investor in Simply Affordable Homes.”
The London CIV UK Housing Fund is an open-ended vehicle backed by the local government pension scheme.
Osborne added: “Private capital has a vital role to play in the affordable housing sector, and we are confident that Savills IM will deliver robust long-term returns for our partner funds, and through its impact-led approach support the provision of much needed affordable homes in the UK, through investing in existing, and increasing the supply of high-quality affordable homes.”
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