London
CBRE Global Investors’ UK Affordable Housing Fund Deploys 90% of Initial Equity in Social Impact Investments with Further Investors Commitment to the Fund
26 May 2021
Corporate Communications Director
Helen Stott
Corporate Communications Director
CBRE Global Investors raises a further £120m equity for its UK Affordable Housing Fund (AHF) having deployed the majority of the £250m of initial capital raised in 2019, significantly ahead of its commitment period.
CBRE UK Affordable Housing Fund was one of the first, and now more established, UK unlisted funds targeting institutional client capital into affordable housing across the UK. It has spearheaded the need for institutional capital to fulfil the funding shortfall of investment to build, refurbish and maintain good quality affordable housing stock where it’s needed most, while delivering attractive returns* for its investors. With its latest capital raise for the open-ended fund, there is scope to deliver over 2,000 homes as projects are completed and occupied.
One important aspect of AHF is its development of a proprietary social impact framework, which was created with support from the Good Economy. The framework measures the impact the investments are likely to deliver for society, something which institutional investors increasingly want to see from their investment strategies. With an income generating portfolio, social impact can be measured, monitored and reported much like return performance. Investors in this impact strategy include international and UK corporate and public pension funds and insurance companies. A number of UK LGPS investors, such as Hampshire County Council Pension Fund, Rhondda Cynon Taf Pension Fund, Wiltshire Pension Fund, Surrey County Council Pension Scheme, Bedfordshire Pension Fund and Royal Borough of Greenwich Pension Fund, were early in the process to support the investment proposition.
To date AHF has made 12 investments across the UK and is currently in advanced due diligence for a further five investments. Recent transactions include the forward funding of 245-home Abbey Place scheme, South East London bringing forward affordable homes in a major regeneration area, the acquisition of the affordable element of 50 homes at a development in Slough Town Centre and the forward funding of a scheme of 121 shared-ownership and affordable-rented homes in Fugglestone Red, Salisbury.
These latest transactions continue the open-ended fund’s strategy of investing in high-quality affordable rental, PRS, shared-ownership, keyworker and temporary accommodation schemes, working together with housing associations to harness their expertise and experience to manage the properties. The fund’s portfolio includes schemes with registered providers such as VIVID, Oak Housing and Pinnacle Group.
Fund Manager for AHF, DJ Dhananjai commented: “We have been able to support communities across the UK by working with local authorities and registered providers to fund the provision of over 1,000 much-needed affordable homes with the potential to house over 2,500 people. By working collaboratively with operators in the sector, we have succeeded in increasing housing development and delivery pipelines, while enhancing services offered to occupiers. We continue to seek out opportunities as we look to deploy the next £120 million of commitments into this sector, which increasingly appeals to our clients as their sustainability and social goals are achieved in a demonstrable and transparent way.”
“The fund combines attractive return* characteristics for investors seeking stable returns over the very long-term and a consistent income profile along with a social conscience,” added Alice Wilcox, Head of LGPS Partnerships, CBRE Global Investors.
* Past performance is not necessarily indicative of future returns
About CBRE UK Affordable Housing Fund
The CBRE UK Affordable Housing Fund is an unlisted open-ended core fund designed to invest in affordable housing assets across the United Kingdom. The Fund provides investors exposure to an emerging investment asset class providing diversification and distributing stable income. The Fund launched in December 2018, with circa £250m of seed capital from 13 institutional investors. The Fund offers investors the opportunity to invest in a high social impact sector with strong ESG credentials.
About CBRE Global Investors
CBRE Global Investors is a global real assets investment management firm with $124.5 billion in assets under management* as of March 31, 2021. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.
CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2020 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 100,000 employees serving clients in more than 100 countries. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com
*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers.
Important Notice
CBRE UK Affordable Housing Fund invests in assets that may at times be hard to sell. This means that there may be occasions when you experience a delay or receive less than you might otherwise expect when selling your investment. For more information on risks, see the Prospectus.
This material may not be distributed in any jurisdiction in which it is illegal to do so. CBRE UK Affordable Housing Fund is authorised by the Financial Conduct Authority (FCA). This Fund is for professional or qualifying investors who are eligible to invest in a Qualifying Investor Scheme (QIS) within the meaning of the FCA Rules only. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. It is not available to ordinary retail investors. CBRE Global Investors (UK Funds) Limited obtained its Alternative Investment Fund Managers Directive (AIFMD) licence from the FCA on 15 July 2014 and is the alternative investment fund manager (AIFM) for the CBRE UK Affordable Housing Fund.
The CBRE UK Affordable Housing Feeder Fund is a Feeder fund for the CBRE UK Affordable Housing Fund and it is also authorised by the FCA. This Unit Trust Feeder is for professional or qualifying investors who are eligible to invest in a QIS within the meaning of the FCA Rules only.
The information contained herein must be treated in a confidential manner and may not be reproduced, used or disclosed, in whole or in part, without the prior written consent of CBRE Global Investors. This document should not be regarded as a substitute for the exercise by the recipient of its, his or her own judgement. The figures in this document have not been audited by an external auditor. This document does not purport to be a complete description of the markets, developments or securities referred to in this report. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed. Past performance is not a guide to future performance. Forecasts of future performance are not an indicator of future performance. All target or projected “gross” internal rates of return (“IRRs”) do not reflect any management fees, incentive distributions, taxes, transaction costs and other expenses to be borne by certain and/or all investors, which will reduce returns. “Gross IRR” or “Gross Return” shall mean an aggregate, compound, annual, gross internal rate of return on investments. “Net IRR” or “Net Returns” are shown after deducting fees, expenses and incentive distributions. There can be no assurance that the mandate will achieve comparable results, that targeted returns, diversification or asset allocations will be met or that the investment strategy and investment approach will be able to be implemented or that the mandate will achieve its investment objective. Actual returns on unrealized investments will depend on, among other factors, future operating results, the value of the underlying assets and market conditions at the time of disposition, foreign exchange gains or losses which may have a separate and uncorrelated effect, legal and contractual restrictions on transfer that may limit liquidity, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on which the valuations used in the prior performance data contained herein are based. Accordingly, actual returns may differ materially from the returns indicated herein. The value of any tax benefits described herein depends on your individual circumstances. Tax rules may change in the future. CBRE Global Investors and its affiliates accept no liability whatsoever for any direct, consequential or indirect loss of any kind arising out of the use of this document or any part of its contents. Where funds are invested in property, investors may not be able to realize their investment when they want. Whilst property valuation is conducted by an independent expert, any such opinion is a matter of the value's opinion. Property is a specialist sector which may be less liquid and produce more volatile performance than an investment in broader investment sectors. This material is for discussion purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer or solicitation shall be made only pursuant to the Prospectus of the Fund, which describes risks related to an investment in the Fund as well as other important information about the Fund. Offers and sales of interests in the Fund will not be registered or qualified under the laws of any jurisdiction and will be made solely to qualified investors under all applicable laws. The information in the material set forth herein does not purport to be complete and is subject to change. This material is qualified in its entirety by all of the information set forth in the Prospectus. The Prospectus and the governing documents of a Fund must be read carefully in their entirety prior to investing in a Fund. This material does not constitute a part of the Prospectus. Prior to investing in a Fund, prospective investors should consult with their own investment, accounting, regulatory, tax and other advisors as to the consequences of an investment in the Fund. Issued and approved by CBRE Global Investors (UK Funds) Limited, which is authorized and regulated by the FCA in the United Kingdom.
CBRE UK Affordable Housing Fund was one of the first, and now more established, UK unlisted funds targeting institutional client capital into affordable housing across the UK. It has spearheaded the need for institutional capital to fulfil the funding shortfall of investment to build, refurbish and maintain good quality affordable housing stock where it’s needed most, while delivering attractive returns* for its investors. With its latest capital raise for the open-ended fund, there is scope to deliver over 2,000 homes as projects are completed and occupied.
One important aspect of AHF is its development of a proprietary social impact framework, which was created with support from the Good Economy. The framework measures the impact the investments are likely to deliver for society, something which institutional investors increasingly want to see from their investment strategies. With an income generating portfolio, social impact can be measured, monitored and reported much like return performance. Investors in this impact strategy include international and UK corporate and public pension funds and insurance companies. A number of UK LGPS investors, such as Hampshire County Council Pension Fund, Rhondda Cynon Taf Pension Fund, Wiltshire Pension Fund, Surrey County Council Pension Scheme, Bedfordshire Pension Fund and Royal Borough of Greenwich Pension Fund, were early in the process to support the investment proposition.
To date AHF has made 12 investments across the UK and is currently in advanced due diligence for a further five investments. Recent transactions include the forward funding of 245-home Abbey Place scheme, South East London bringing forward affordable homes in a major regeneration area, the acquisition of the affordable element of 50 homes at a development in Slough Town Centre and the forward funding of a scheme of 121 shared-ownership and affordable-rented homes in Fugglestone Red, Salisbury.
These latest transactions continue the open-ended fund’s strategy of investing in high-quality affordable rental, PRS, shared-ownership, keyworker and temporary accommodation schemes, working together with housing associations to harness their expertise and experience to manage the properties. The fund’s portfolio includes schemes with registered providers such as VIVID, Oak Housing and Pinnacle Group.
Fund Manager for AHF, DJ Dhananjai commented: “We have been able to support communities across the UK by working with local authorities and registered providers to fund the provision of over 1,000 much-needed affordable homes with the potential to house over 2,500 people. By working collaboratively with operators in the sector, we have succeeded in increasing housing development and delivery pipelines, while enhancing services offered to occupiers. We continue to seek out opportunities as we look to deploy the next £120 million of commitments into this sector, which increasingly appeals to our clients as their sustainability and social goals are achieved in a demonstrable and transparent way.”
“The fund combines attractive return* characteristics for investors seeking stable returns over the very long-term and a consistent income profile along with a social conscience,” added Alice Wilcox, Head of LGPS Partnerships, CBRE Global Investors.
* Past performance is not necessarily indicative of future returns
About CBRE UK Affordable Housing Fund
The CBRE UK Affordable Housing Fund is an unlisted open-ended core fund designed to invest in affordable housing assets across the United Kingdom. The Fund provides investors exposure to an emerging investment asset class providing diversification and distributing stable income. The Fund launched in December 2018, with circa £250m of seed capital from 13 institutional investors. The Fund offers investors the opportunity to invest in a high social impact sector with strong ESG credentials.
About CBRE Global Investors
CBRE Global Investors is a global real assets investment management firm with $124.5 billion in assets under management* as of March 31, 2021. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.
CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2020 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 100,000 employees serving clients in more than 100 countries. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com
*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers.
Important Notice
CBRE UK Affordable Housing Fund invests in assets that may at times be hard to sell. This means that there may be occasions when you experience a delay or receive less than you might otherwise expect when selling your investment. For more information on risks, see the Prospectus.
This material may not be distributed in any jurisdiction in which it is illegal to do so. CBRE UK Affordable Housing Fund is authorised by the Financial Conduct Authority (FCA). This Fund is for professional or qualifying investors who are eligible to invest in a Qualifying Investor Scheme (QIS) within the meaning of the FCA Rules only. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. It is not available to ordinary retail investors. CBRE Global Investors (UK Funds) Limited obtained its Alternative Investment Fund Managers Directive (AIFMD) licence from the FCA on 15 July 2014 and is the alternative investment fund manager (AIFM) for the CBRE UK Affordable Housing Fund.
The CBRE UK Affordable Housing Feeder Fund is a Feeder fund for the CBRE UK Affordable Housing Fund and it is also authorised by the FCA. This Unit Trust Feeder is for professional or qualifying investors who are eligible to invest in a QIS within the meaning of the FCA Rules only.
The information contained herein must be treated in a confidential manner and may not be reproduced, used or disclosed, in whole or in part, without the prior written consent of CBRE Global Investors. This document should not be regarded as a substitute for the exercise by the recipient of its, his or her own judgement. The figures in this document have not been audited by an external auditor. This document does not purport to be a complete description of the markets, developments or securities referred to in this report. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed. Past performance is not a guide to future performance. Forecasts of future performance are not an indicator of future performance. All target or projected “gross” internal rates of return (“IRRs”) do not reflect any management fees, incentive distributions, taxes, transaction costs and other expenses to be borne by certain and/or all investors, which will reduce returns. “Gross IRR” or “Gross Return” shall mean an aggregate, compound, annual, gross internal rate of return on investments. “Net IRR” or “Net Returns” are shown after deducting fees, expenses and incentive distributions. There can be no assurance that the mandate will achieve comparable results, that targeted returns, diversification or asset allocations will be met or that the investment strategy and investment approach will be able to be implemented or that the mandate will achieve its investment objective. Actual returns on unrealized investments will depend on, among other factors, future operating results, the value of the underlying assets and market conditions at the time of disposition, foreign exchange gains or losses which may have a separate and uncorrelated effect, legal and contractual restrictions on transfer that may limit liquidity, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on which the valuations used in the prior performance data contained herein are based. Accordingly, actual returns may differ materially from the returns indicated herein. The value of any tax benefits described herein depends on your individual circumstances. Tax rules may change in the future. CBRE Global Investors and its affiliates accept no liability whatsoever for any direct, consequential or indirect loss of any kind arising out of the use of this document or any part of its contents. Where funds are invested in property, investors may not be able to realize their investment when they want. Whilst property valuation is conducted by an independent expert, any such opinion is a matter of the value's opinion. Property is a specialist sector which may be less liquid and produce more volatile performance than an investment in broader investment sectors. This material is for discussion purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer or solicitation shall be made only pursuant to the Prospectus of the Fund, which describes risks related to an investment in the Fund as well as other important information about the Fund. Offers and sales of interests in the Fund will not be registered or qualified under the laws of any jurisdiction and will be made solely to qualified investors under all applicable laws. The information in the material set forth herein does not purport to be complete and is subject to change. This material is qualified in its entirety by all of the information set forth in the Prospectus. The Prospectus and the governing documents of a Fund must be read carefully in their entirety prior to investing in a Fund. This material does not constitute a part of the Prospectus. Prior to investing in a Fund, prospective investors should consult with their own investment, accounting, regulatory, tax and other advisors as to the consequences of an investment in the Fund. Issued and approved by CBRE Global Investors (UK Funds) Limited, which is authorized and regulated by the FCA in the United Kingdom.