AEW has launched its first place-based impact fund, an open-ended fund to target real estate with a social use value.
The UK Impact Fund has been seeded with a £100m UK portfolio. The assets include care homes, supported living and key worker accommodation, as well as wellbeing-focused, residential-led town centre regeneration projects.
Nick Winsley, head of AEW UK, said: “The built environment has a huge influence on people’s everyday lives, and the launch of our first impact fund provides investors with an opportunity to invest in a way that creates a tangible positive social and environmental impact, while also achieving their return objectives. Seeded with a portfolio of strongly performing assets, the fund is already delivering on its social value and cashflow objectives, and we are excited to grow the fund from here.”
The fund will work in collaboration with local authorities, by increasing the provision of housing, care facilities, nurseries and leisure and community premises. UKIF will adopt an active management, core-style strategy and seek to generate a sustainable income stream and return for investors.
AEW, which has more than €80bn (£68bn) of assets under management worldwide, said the strategy would play to the strengths of “real estate’s role as a provider of social and community infrastructure, combining investments focused on social and environmental impact”.
AEW recently received approval from the FCA and investors to transition its Real Return Fund into the new strategy, using the RRF’s existing portfolio of impact assets.
The RRF has a seven-year track record of investing in alternative sectors influenced by social and demographic needs, and last quarter topped both the MSCI/AREF UK Long Income Open-Ended Property Fund Index and the MSCI/AREF All Balanced Funds Index over a five-year period.
AEW is now actively looking to raise capital on behalf of UKIF, targeting a range of investors, from institutional capital and local government pension schemes to private wealth.
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