Legal & General’s (L&G) newly launched UK affordable housing fund has secured a £120m (€140m) investment from the Greater Manchester Pension Fund (GMPF) bringing total capital raised to £280m.
Legal & General said it worked with GMPF together to design the strategy which led to the launch of the Legal & General Affordable Housing Fund in July.
Last month, ACCESS Pool, which manages £45bn of UK local government pension schemes (LGPS) assets, committed £125m to the L&G-managed UK affordable housing investment strategy.
At the time, L&G said the fund, which has a pipeline of new homes via its affordable homes business Legal & General Affordable Homes, will hold over 750 homes at launch.
In the latest update, L&G said it has now secured a further £150m in commitments for the strategy, the majority of which was contributed by the LGPS GMPF, “who have committed £120m alongside internal client capital”.
Councillor Gerald Cooney, chair of GMPF, said: “As a leader of a council, as well as a chair of a pension fund I know the depth of the housing crisis in which we find ourselves as a nation. We see it as we place record numbers of homeless children in temporary accommodation; as we grapple with waiting lists for social housing getting longer and longer; and younger residents are priced out of home ownership.
“That’s why we are proud to be the cornerstone of this investment with longstanding investment partner Legal & General and support the Government’s plan to provide much needed affordable homes for hardworking families whilst aiming to deliver strong low risk returns to pay the pensions of our hardworking members.”
Laura Mason, CEO of private markets, asset management division at L&G, said: “Today’s announcement demonstrates the important role pensions capital can play in investing in tangible assets that we believe can benefit the real economy while seeking to deliver positive societal outcomes.
“With acute demand for affordable housing across the UK and with government signalling the delivery of more affordable homes as a top priority, the public and private sector need to work together to drive change, and institutional investment has a pivotal part to play.”
Ali Farrell, fund manager in the L&G’s asset management division, said: “Reaching £280m, following a further £150m of investment, marks an important step forward in how we direct long-term pensions capital into unlocking more homes across the UK.
“L&G’s enduring commitment to the housing sector reflects the opportunity for institutional investors to not only secure steady, inflation-linked returns, but also the opportunity to make real world impact.”
Ben Denton, CEO, Legal & General Affordable Homes, said: “The fund will aim to positively impact hundreds of people’s lives, focussing on equity and affordability as its core social priority.
“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.”
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