Octopus Investments' Affordable Housing Fund has attracted a £10 mln (€11.6 mln) comittment from the UK’s leading social impact investor, and announced a maiden acquisition.
Big Society Capital's equity pledge will help Octopus to fund the building of good quality, affordable homes with sustainability standards, and follows hot-on-the-heels of a first close of the fund, following the investment from London CIV in December.
The first acquisition will be of 26 homes in Great Haddon, Peterborough, from Vistry Homes. The scheme comprises eight houses and 18 flats and will offer a mix of both affordable rent and shared ownership tenures.
Octopus Investments is part of the Octopus Group, which is B Corp-certified investment company for investors who believe their money can be a force for good, it states with a statement that it is on a mission to invest £50 bn 'in the people, ideas and industries that will change the world'.
It invests £13bn for institutional investors, retail investors and their financial advisers.
Drew Ritchie, investment director at Big Society Capital, said of its commitment to Octopus: 'We believe that impact-driven private capital has a vital role to play in addressing the country’s housing shortage and we seek to invest in best-in-class managers and investment models that we believe can unlock capital at scale.'
'This is one of the reasons why we have invested into Octopus’ Affordable Housing Fund, as well as its strong focus on supporting low-income families and older households to access a quality, secure and affordable home.'
'We were keen to back the fund's equity partnerships model that can work hand-in-hand with the Housing Association sector to maintain and increase new affordable supply.'
Jack Burnham, head of affordable housing at Octopus, explained the UK affordable housing investment market was still relatively nascent, but was growing.
'We continue to receive strong demand from investors. They are attracted by the potential to generate long-dated sustainable income, low correlation to other real estate sectors and the ability to have real tangible impact.'
'We are thrilled that BSC have decided to trust us with their capital. It is a sign of their conviction in the funding model and our team’s ability to execute our strategy. We also see it is a stamp of approval in terms of the impact we are trying to achieve.'
'And we’re not wasting any time. To be able to deploy the first capital just five weeks after our initial fund close is something we are really proud of. We look forward to working with Vistry on building affordable homes at Great Haddon.'
