Homes England and Newstead Capital have launched a fund to help small and medium-sized housebuilders.
The government’s housing and regeneration agency, alongside the Greater Manchester Pension Fund, clients of listed wealth manager Mattioli Woods and other private institutional investors, have committed £80m to the initial close of the Newstead SME Real Estate Lending Fund.
Peter Denton, chief executive of Homes England, said: “This partnership is our latest intervention to offer SME housebuilders a route to finance that may otherwise be unavailable through traditional means.
“Introducing new sources of institutional capital to support SME housebuilders is a priority for Homes England. Our cornerstone investment in this fund signals government support for accessible and competitive finance to meet the needs of SME developers across the country.”
The fund will be managed by Newstead Capital, with the intention to raise further capital to £300m and deliver £1bn of funding over its lifetime.
Simon Champ, CEO at Newstead Capital, added: “This is an exciting step for Newstead. Our fund is the first of its kind. We are providing a conduit for long-term institutional investors to gain access to a market which until now has been out of reach.”
The fund, which will link its lending to high ESG standards and metrics, will enable the construction of more than 5,000 affordably priced and efficient new homes in England.
Ged Cooney, chair of the Greater Manchester Pension Fund, said: “We are pleased to support the Newstead residential RELF, which will allow more new homes to be built, by empowering local SME builders to develop smaller sites often overlooked by larger housebuilders. These new homes will help to address the housing shortage, contributing to levelling up and bring environmental benefits. The financial return from our investment will enable GMPF to meet its future pension obligations to its members.”
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