ACCESS, LGPS Central allocate to real estate strategies

The appointment is part of a wider allocation of more than £2.5bn to property strategies within the £45bn Local Government Pension Scheme (LGPS) pool.

Orchard Street’s impact approach will target decarbonisation of builidngs, ACCESS said in a statement, and will aim to deliver a financial return as well as environmental, social and governance outcomes “based on measurable targets”.

Mark Kemp-Gee, chairman of the ACCESS Joint Committee, added that the strategy would also seek to “improve health and create social engagement with local communities”.

He said “This allocation marks a key step in our ongoing initiative to diversify into the private markets. We have been impressed with Orchard Street’s history of impact investing in commercial real estate and their leading stance on responsible investing.”

ACCESS is the second LGPS pool to invest with Orchard Street, following a £90 million allocation by Brunel Pension Partnership in 2022.

ACCESS funds to allocate £2.4 billion to property
The Orchard Street mandate follows confirmation from ACCESS that its partner funds will invest more than £2.4 billion in two other real estate strategies launched late last year.

Six LGPS funds – Norfolk, East Sussex, Suffolk, Cambridgeshire, Hertfordshire and Northamptonshire – have invested in ACCESS’s UK Core fund, alongside previous allocations from Essex and Hampshire. The total investment is expected to reach £1.7 billion.

The same funds have also pledged capital to the ACCESS Global Indirect Fund, investing a combined £780 million.

In total, ACCESS said the commitments were 40% more than it initially expected. Both funds are managed by CBRE Investment Management.

Kemp-Gee said: “Our member authorities can realise a number of positives – in this case, a unified approach, diversification and cost efficiencies – to the ultimate aid of their investment objectives for members.”

LGPS Central targets affordable housing investment
Separately, LGPS Central has deployed £40 million from three partner funds into an affordable housing strategy.

The Cheshire, Derbyshire and Staffordshire funds have invested in PGIM Real Estate’s UK Affordable Housing strategy through the pool.

The PGIM strategy invests in single-family homes for let at affordable rents to boost supply, while also focusing on energy efficiency.

LGPS Central said its eight partner funds had now committed more than £5 billion to private markets strategies, of which 25% was deployed within the UK.

Mike Hardwick, investment director for property at the pool, said the investment “underscores our commitment to achieving robust investment returns for our partner funds while also addressing the critical need for affordable housing in the UK”.