Places for People, a former housing association, has created a real estate fund management arm called PfP Capital.
The UK property manager and developer also said it is moving 1,379 units worth around £150m (€172m) into a new private-rented sector (PRS) residential fund.
The units will seed the new vehicle, which will offer a net 5% rental yield and aim to double in size to £300m.
Touchstone, Places for People’s management business, will oversee the portfolio.
PfP Capital will be managed by Chris Jones, managing director, and Tim Saunders, fund director.
Saunders said: “The new fund presents institutional investors with an opportunity to partner with a socially-conscious fund manager. We can offer an attractive income yield from day one.
“We will embark on proactive asset management of the properties within the fund’s portfolio and there is an opportunity to enhance returns through reinvestment by disposing of select broken blocks.”
Saunders said there was significant potential for future growth.
“We will be seeking acquisition opportunities to grow the fund’s portfolio to around 2,500 units through offtake from Places for People’s 15,000 unit development pipeline and opportunistic acquisitions from housebuilders and developers.”
The UK residential sector was the second best performing sector of the country’s property market last year, according to MSCI figures out today.
The performance of residential market let assets was 2.8% for 2016, with capital values at 0.1%. In comparison, average capital values on all property fell 0.8% for the same period.