SRI real estate fund gains positive pensions start

UK - Local authority pension funds have given their financial backing to a new socially-responsible real estate fund based in the UK and launched by Bridges Ventures.

The fund represents the first foray into the property market by the social investing venture capital firm but officials intend to build on their experience of investing in companies in regeneration areas and sustainable business sectors.

Bridges Ventures has achieved the first closing of its new Sustainable Property Fund with initial equity commitments of £26m (€29m) - giving it an immediate investment capacity of over £50m with leverage - from the likes of the West Midland Pension Fund and Merseyside Pension Fund.

The fund is described as aiming to deliver investors "an unusual combination of highly attractive financial returns and social and environmental benefits".

Bridges Ventures will invest in a range of value-added asset management and tenant-led developments, such as acquiring older buildings and renovating them to meet higher environmental standards.

It will also undertake development of new space that shows environmental leadership, typically for specific tenants and owner occupiers who seek accommodation meeting high environmental standards.

Transactions will be undertaken either directly or in joint ventures with experienced partners.

The firm said a number of potential transactions were already under consideration across the healthcare, waste-to-energy and affordable housing sectors.

"The financial backing that we have received from a wide range of investors at this first closing demonstrates that there is demand from an increasing range of investors who seek to support property projects that generate positive environmental and regeneration impact, without compromising financial returns," said Simon Ringer, managing director for the fund.

"Our fund gives these parties access to a diversified deal flow of profitable opportunities in a market sector which is likely to grow exponentially as more investors recognise the inevitable impact of environmental changes and corporate social responsibility across the property sector, and the effect on their investment returns," said Ringer.