Orchard Street Investment Management, the UK focussed commercial property investment manager, has announced the launch and first close of its inaugural impact fund, Orchard Street social and environmental impact partnership (SEIP).
Just under £90 mln (€105 mln) has been committed at first close, with Brunel Pension Partnership, one of the UK’s local government pension scheme pools, acting as the fund’s cornerstone investor on behalf of eight of its ten underlying local authority partner funds.
This capital also includes co-investment committed by Orchard Street’s partners and members of Orchard Street’s senior team, demonstrating the firm’s personal and professional alignment of interests in creating investment opportunities that make an environmental and social difference.
The fund, which has been approved by The Townsend Group, will target value-add real estate investment opportunities with the potential to generate a measurable social and environmental impact.
Specifically, it will focus on the three impact areas of decarbonising existing buildings via an accelerated programme of refurbishment; investing in local communities; and making buildings healthier for those that live and work in them.
Sector agnostic, the fund will invest into its pipeline of UK wide opportunities that meet its stringent impact criteria.
Orchard Street has also decided to link 30% of its performance fees to the achievement of the fund’s specific impact objectives, thereby aligning itself not only to financial outcomes but also to key environmental and social goals.
The fund's advisers include JLL Upstream Sustainability Services, the largest specialist sustainable property team in the UK, which advised on the development of the fund; Carbon Intelligence, part of Accenture, which will manage the ESG performance data for the fund’s assets; and BlueMark, which will provide ongoing independent assurance of the fund’s impact objectives and reporting.
Philip Gadsden, portfolio director of SEIP and managing partner at Orchard Street Investment Management, commented: 'One of the underlying drivers behind both our efforts as a business and the launch of this fund is the forecast that 80% of the buildings that will exist in the UK by 2050 already exist now, underlining the impetus for immediate action to be taken today to remediate existing but underutilised buildings, and aligning the fund with Article 8 of the SFDR.'
