The Tyne and Wear- and Scottish Borders Council Pension Fund have become the latest LGPS investors to back CBRE Investment Management’s Affordable Housing Fund bringing total commitments to £500m.
The investment marks the latest allocation to the UK for the £10.7bn Tyne and Wear Pension Fund, which is part of the Border to Coast pool. It has also recently committed £100m to the pool’s UK Opportunities fund. Tyne and Wear holds around 9% of its overall portfolio in UK real estate and a further 4% in global real estate, according to its latest Annual Report.
The Scottish Borders Council Pension Fund has £866m in assets and holds 11.8% in long-lease property and a further 1.6% in balanced property.
CBRE did not disclose the exact amount of the investments but shared that this brings the total number of LGPS subscribers to nine, with a total of 22 institutional investors having committed to the affordable housing fund.
The fund focuses on social and affordable rented housing as well as affordable ownership properties, aims to deliver measurable social outcomes. By investing in this fund, these pension funds are contributing to the creation of approximately 2,098 homes, potentially housing over 5,600 people.
The AHF has already deployed capital in some of the UK’s most deprived areas, aligning with the economic renewal and levelling-up agenda. More than half of the fund’s investments are in projects that are affordable for tenants receiving housing benefits, demonstrating a strong alignment with the social objectives of the pension funds, CBRE said.
Andrew Davey, head of Liability Aware Strategies UK and Fund Manager for AHF at CBRE Investment Management, emphasised the dual benefits for investors, stating, “The AHF offers investors like Tyne and Wear Pension Fund and Scottish Borders Council Pension Fund the opportunity to access attractive risk-adjusted returns while achieving their impact goals. The independent audit of our performance against these impact objectives provides transparency and a proven track record, which has been key to our success.”
Since its inception, AHF has collaborated with The Good Economy (TGE) to implement a comprehensive impact framework. This framework measures and manages social impact and wider ESG performance, providing accountability and transparency. The partnership with TGE is aimed at ensuring that all fund-level decisions are guided by rigorous impact assessments, with annual independent audits preventing any form of impact or green-washing.
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