ACCESS appoints Legal & General as Social & Affordable housing manager

ACCESS has allocated £125 million to a new affordable housing fund launched by Legal & General.

The commitment to the newly launched L&G Affordable Housing Fund follows a manager search that began in January and was overseen by Apex Investment Advisory.

Councillor Mark Kemp-Gee, chair of the ACCESS Joint Committee, said: “This allocation marks yet another key step in our initiative to diversify in private markets. We have been impressed with L&G’s history of delivery in the affordable housing space over a long period and believe this investment partnership will provide robust, stable, long-term financial returns for our members alongside meaningful social benefits.”

The new fund aims to deliver a “diversified inflation-linked cash flow for investors”, according to L&G. It will invest in “well-designed, purpose-built affordable rent and shared ownership housing in areas of acute need and demand across England”.

According to data from the Department for Levelling Up, Housing and Communities, more than 58,000 new-build affordable homes were completed in the 2022-23 financial year – the highest number on record.

However, this figure is well below the level recommended by the National Housing Federation, which has said that England requires approximately 145,000 new affordable homes a year until 2031 to meet current demand.

L&G said the Affordable Housing Fund would “aim to positively impact hundreds of people’s lives”, on top of providing a financial return for investors. It already has more than 750 houses in the portfolio.

The company also said the investments would align with its aim to achieve net zero carbon emissions by 2050 or sooner.

António Simões, group CEO at L&G, said: “Today’s launch is an important step forward in putting pensions capital to work by investing in tangible assets that can help benefit the real economy and enhance local communities.

“With acute demand for affordable housing across the UK, the public and private sector need to work together to drive change.”

ACCESS has had an active first half of 2024, with new allocations to timber, long-lease property, and core and global real estate mandates. This latest commitment brings the pool’s total new investments made this year to almost £2 billion.

The pool is also currently conducting a manager search for a UK impact investment mandate, with a focus on decarbonisation, which will be worth an initial £100 million.