Orchard Street Investment Management has announced the launch and first close of its inaugural impact fund Orchard Street Social and Environmental Impact Partnership (SEIP).
At first close just under £90m was committed, with Brunel Pension Partnership, one of the UK’s Local Government Pension Scheme pools, acting as the fund’s cornerstone investor on behalf of eight of its ten underlying local authority partner funds. This capital also includes co-investment committed by Orchard Street’s partners and members of Orchard Street’s senior team.
The sector agnostic fund will target value-add real estate investment opportunities with the ‘potential to generate a measurable social and environmental impact’ and will focus on three specific areas: decarbonising existing buildings via an accelerated programme of refurbishment; investing in local communities, using a proprietary place-based needs model to identify and respond to local social issues; and making buildings healthier for those that live and work in them.
Philip Gadsden, portfolio director of SEIP and Managing Partner at Orchard Street Investment Management, said: “One of the underlying drivers behind both our efforts as a business and the launch of this fund is the forecast that 80% of the buildings that will exist in the UK by 2050 already exist now, underlining the impetus for immediate action to be taken today to remediate existing but underutilised buildings, and aligning the fund with Article 8 of the SFDR.
“Buildings that offer top quality space and strong ESG credentials will continue to command the best rents and prices, with this fund therefore providing not only an avenue for investors to enjoy strong financial returns, but also a significant positive social and environmental impact. By fully integrating impact into our investment approach – with ambitious decarbonisation, wellbeing and community investment targets – the fund will accelerate the property sector’s decarbonisation, while maximising the value of buildings as a tool to promote health and community investment.
Vanessa Jacka, portfolio manager, Brunel Pension Partnership, added: “Brunel and its clients are delighted to be seeding this enlightened fund launch, whereby manager performance returns are linked to specific Responsible Investment objectives. The Townsend Group has assisted Brunel and Orchard Street in securing a robust process for measuring and auditing outcomes, and we believe investors are well-placed to realise their financial and social targets as a result of Orchard Street’s SEIP strategy.”
Advisers to the fund include JLL Upstream Sustainability Services, Carbon Intelligence and BlueMark.
