Octopus Investments finalises £50m first close of Affordable Housing Fund
Octopus Investments has finalised the first close of its Affordable Housing Fund.
Set up to develop more than 500 affordable family and senior living homes, the fund is the first step towards Octopus’ overall target to fund the delivery of 5,000 homes over the next few years.
The first close of £50m was achieved with capital from London CIV, the investment pool for 32 of London’s local government pension schemes.
Octopus Investments has finalised the first close of its Affordable Housing Fund.
Set up to develop more than 500 affordable family and senior living homes, the fund is the first step towards Octopus’ overall target to fund the delivery of 5,000 homes over the next few years.
The first close of £50m was achieved with capital from London CIV, the investment pool for 32 of London’s local government pension schemes.
It provides co-investment opportunities for local authorities, LGPS and local investors, increasing the total capital available for affordable housing and driving alignment around the delivery of schemes in local areas.
The fund will not invest in specialist supported housing.
Jack Burnham, head of affordable housing at Octopus, said: “In creating the fund, we have listened carefully to the needs of the affordable housing sector. We know that housing associations are increasingly comfortable using alternative finance routes to build and operate more homes, with half of CFOs in the sector now more likely to work with equity partners compared with just 12 months ago. We think there is potential for these partnerships to have a seismic impact on the delivery of affordable housing across the country.
“Having our own registered provider, NewArch, allows us to speak a common language with housing associations and holds us to the same regulatory standards, meaning we are in a better position to understand what is important to them in developing fair and long-term partnerships.
“NewArch also allows us to operate a scalable, direct-let model to ensure a fair sharing of risk with our partners – we’ll be heavily involved with them in ensuring the high quality of accommodation and management of the properties. This shows our sustainability goals go beyond asset-level ESG, as we’re focusing on the sustainability of our model itself.”
Ed Clough, managing director at Octopus Real Estate, added: “This is an evergreen fund that we will continue to scale for years to come. This means we can support our housing association partners in providing affordable homes for the long-term, creating stability for both residents and investors.”
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