Octopus Investments has raised £150m from a number of local government pension schemes for its affordable housing fund.
The new commitments come from the local government pension schemes from Avon (£50m), Gloucestershire (£50m), Devon (£40m) and Clwyd (£10m), and include co-investment to deliver affordable homes in specific geographic areas.
The fund announced its first close in December 2023, with a £50m raise from London CIV – the investment pool for 32 of London’s LGPS – and an additional £10m from social impact investor Better Society Capital. The capital raised last year has now been fully allocated to affordable housing projects.
Jack Burnham, head of affordable housing at Octopus, said: “We know there are a number of locally interested investors who are looking for opportunities to deploy capital into funds that can provide specific social impact to their local areas. We think this is an approach that should be embraced and are thrilled to be working with Avon, Gloucestershire, Devon and Clwyd pension funds to help support them either deliver affordable homes in their areas, or in other areas across the UK.”
Shaun Stephenson-McGall, chair of the Avon Pension Fund investment panel, added: “We are delighted to invest £50m in affordable housing. This is broadly the equivalent of 250 new homes being built for up to 1,000 people. Critically at least 20% will be in the Avon region. The new-build properties will raise the supply of secure, affordable and energy-efficient homes, for those that need them most.
“We’re proud to have worked alongside Devon and Gloucestershire pension funds to get this investment over the line. This investment will help us meet our new net zero 2045 goal, while delivering attractive financial returns, to help us meet future pension promises.”
Phil Latham, head of Clwyd Pension Fund, added: “Clwyd Pension Fund is delighted to partner with Octopus to deliver affordable housing across the UK. This collaboration matches our ambition of driving positive societal and environmental impact in the UK, while also fulfilling our fiduciary duty of achieving sustainable investment returns.”
