Cardano, the pensions advisory and investment management specialist, and Big Society Capital, the UK’s leading social impact investor, are joining forces to address the UK housing crisis.
The parties intend to direct up to £195 mln (€233 mln) of new investment towards real estate fund strategies, combining Big Society Capital’s own investment and client capital from both firms.
The firms are calling on real estate fund managers to participate in a joint Request for Proposals (RfP) focused on fund strategies that increase the supply of good quality, affordable housing in the UK – alongside generating a market rate financial return.
The organisations aim to expand the market through Big Society Capital’s own investments combined with both firms’ client investments, as well as facilitating additional institutional investment alongside them.
Gemma Bourne, investment director, Big Society Capital, commented: 'We predict that the social and affordable housing market will reach £8 bn by 2025 as more fund managers and investors become aware of their potential to generate genuine and positive impact on the UK’s housing crisis.
'We’re thrilled to be working in partnership with Cardano as we collectively seek to support impact funds that work fairly for all stakeholders whilst also delivering investor returns.'
Big Society Capital and Cardano (on behalf of its clients) are targeting investments up to £45 mln and £150 mln respectively. Both firms will assess proposals on a fully independent basis.
Investors are increasingly turning to the social and affordable housing sector – already valued at £3 bn and expected to more than double by 2025 – in line with the growing trend for investors to demand stable returns, alongside positive social and / or environmental impact, said Cardano.
The RfP will be open to proposals that offer meaningful solutions to help address UK social and affordable housing challenges for the benefit of vulnerable or lower income people, alongside generating attractive, risk adjusted returns.
Geordie Cox, investment manager, private markets, Cardano, commented: 'This is a sector where investments can improve lives but also offer attractive investment characteristics for our (principally pension) clients: resilient, inflation linked cash-flows; often with government backing and often diversifying in a portfolio.'
