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Giant pension fund invests £100m into new regional arm of L&G’s affordable housing fund
A giant pension fund has invested £100m into a new regional arm of Legal & General (L&G)’s affordable housing fund.
The Greater Manchester Pension Fund (GMPF) has backed the new regional vehicle, which L&G described as a “structural extension” to its affordable housing fund launched in July 2024.
This specific vehicle has been tailored for the Northern LGPS (local government pension scheme), of which GMPF is a member, to allow members to deploy capital into affordable housing developments specifically in the North West of England.
These schemes will be developed and operated by Legal & General Affordable Homes, L&G’s for-profit provider, which currently has 8,000 homes in operation or development.
In 2023, L&G Affordable Homes built 1,304 homes and posted a pre-tax profit of £1.3m.
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Other Northern LGPS members that could invest in L&G’s new regional vehicle include Merseyside and West Yorkshire local government pension funds.
There are currently 207,000 people on local authority waiting lists for social housing within the North West, according to official statistics.
GMPF, which is the largest local government pension scheme fund and the 11th biggest defined benefit pension fund in the UK, has already committed £120m to L&G’s UK-wide affordable housing fund. It did so in August 2024.
GMPF looks after 375,000 pensions for people who work for Greater Manchester’s 10 local authorities and other organisations such as the National Probation Service, academy schools and housing associations.
Eleanor Wills, chair of GMPF, said: “We are acutely aware of the severe housing crisis, both nationally and in the North West region. With record numbers of homeless children placed in temporary accommodation, the ever-growing waiting lists for social housing, and the younger generation being priced out of homeownership.
“This is why we are proud to continue our longstanding partnership with Legal & General to launch a specific vehicle for Northern LGPS that supports the government’s plan to provide much-needed affordable homes for hardworking families while ensuring strong, low-risk returns to secure the pensions of our members.”
Ali Farrell, fund manager at L&G, said: “This fund is the culmination of a long partnership with GMPF and reflects L&G’s commitment to delivering more affordable housing where it is most needed.
“This is a great example of partnership working between the public and private sectors to increase investment into the affordable housing sector, and increase the choice, quality and availability of affordable housing across North West England.”
Last week, investment giant Octopus told Inside Housing it plans to double the size of its affordable housing fund to £485m this year. It also has an ambition to deploy cash in investors’ geographical areas.
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