Strathclyde Pension Fund has become the latest UK local government pension scheme (LGPS) to commit to Octopus Capital’s open-ended UK affordable housing fund.
The Octopus Affordable Housing Fund has raised an additional £118m (€136m), which comprises a £50m contribution from Strathclyde Pension Fund, alongside £58m and £10m re-ups from London CIV and Avon LGPS, respectively.
As previously reported, the fund had received a further £150m from Avon, Gloucestershire, Devon and Clwyd LGPS. The manager had also announced that London CIV, the asset-pooling vehicle for the UK capital’s 32 public pension funds, invested £50m in the fund, which fund also received an additional £10m from UK social impact investor Better Society Capital.
Octopus Capital said the latest additional capital raised brings the fund’s total funds under management, including co-investment capital, to over £360m, as it targets a £1bn goal by 2026.
The fund currently owns 500 affordable homes.
Jack Burnham, the head of affordable housing at Octopus Capital, said: “We’re delighted to have Strathclyde on board and to be continuing our relationship with Avon and London CIV. It’s great to see this level of interest in affordable housing from LGPS and also from the Government more broadly.
“The announcement of a £39bn commitment to the sector over the next decade in their recent spending review is a hugely positive move. It supports the scale-up of affordable housing delivery across the UK — and aligns closely with the priorities of the long-term institutional investors we work with.
“This commitment gives us the tools and certainty to go further and faster, in partnership with local authorities, housing associations and developers.”
Christopher Osborne, head of real estate at London CIV, said: “London CIV is delighted to have committed a further £58m of capital into the Octopus Affordable Housing Fund, taking its total commitment to £108m.
“Octopus is on course to deliver the target net returns for our underlying London LGPS Partner Funds and remains focused on increasing the supply of good quality and energy-efficient affordable homes across the UK.”
To read the latest IPE Real Assets magazine click here.
