The UK's Legal & General (L&G) has secured a further £150 mln (€175 mln) in commitments for its UK affordable housing strategy, bringing total commitments to the strategy to £280 mln.
The bulk of this new capital comes from Local Government Pension Scheme (LGPS) fund, Greater Manchester Pension Fund (GMPF), which has committed £120 mln alongside internal client capital.
GMPF is the largest LGPS fund and the eleventh biggest defined benefit pension fund in the UK. The business looks after more than 375k pensions, paying over £750 mln of benefits each year.
L&G’s strategy will invest in purpose-built social rent, affordable rent and shared ownership housing in areas of acute need and demand across England and seek to work alongside councils and other providers in response to recent policy announcements and those due in October.
Ali Farrell, fund manager, asset management division said: 'We’re delighted to welcome GMPF to our affordable housing strategy.
'Reaching £280 mln, following a further £150 mln of investment, marks an important step forward in how we direct long-term pensions capital into unlocking more homes across the UK.'
Ben Denton, CEO, Legal & General Affordable Homes (LGAH) added: 'When we launched our affordable homes business back in 2018, we had the aim of attracting new, much-needed institutional investment into the asset class and increasing affordable housing delivery across the country.
'Now with the launch of the fund and the support of partners like GMPF we can make a real impact on people’s lives across the Country, delivering homes that people can afford and place-based solutions to support inclusive growth, alongside delivering great customer service.'
The homes will align with Legal & General’s commitment in aiming to achieve net zero carbon by 2050 or sooner. The pipeline consists of new-build, energy efficient affordable housing stock, >95% of which has an EPC rating B or higher.
With £1bn invested in affordable housing to date, LGAH was established in 2018 as Legal & General’s own developer and operator of affordable housing, with the aim of attracting new, much-needed institutional investment into the asset class.
It now comprises 8,000 homes: over 5,500 in operation and 3,000 in development with further capital secured to support its growth.
