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Hedge fund giant to launch registered provider of social housing
The world’s largest publicly traded hedge fund company intends to launch its own registered provider of social housing, Inside Housing understands.
It is understood Man Group will focus on lease-based transactions with councils and housing associations but also hopes to enter into long-term management contracts with social landlords.
The firm, which manages $114.1bn worth of funds, said in a public release that it will seek to deliver homes for social and affordable rent, shared ownership, Rent to Buy and market rent and sale.
It added that it will launch a new ‘community housing’ team, to be overseen by its newly hired head of community housing and portfolio manager, Shamez Alibhai.
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Mr Alibhai was until recently portfolio manager of the Cheyne Social Property Impact Fund, which he set up. Here, he was involved in lease deals with housing associations and local authorities.
He said: “I am delighted to join Man GPM to develop a UK-focused community housing strategy as part of Man Group’s growing responsible investment platform.
“The scale of the housing shortfall across the UK requires innovative solutions to enable all types of households to help meet their housing aspirations and needs. Man Group’s resources and commitment to socially responsible investing provide a strong foundation for pursuing our goal of alleviating this problem.”
Man Group, best known for sponsoring the literary Man Booker Prize, is the latest in a series of private investors to enter the social housing sector, following the private equity giant Blackstone and the institutional investor Legal & General.
The billionaire family Pears Group has also made an entrance into the sector in recent months and a flurry of private house builders have registered as providers of affordable housing.
Also operating in this space are a number of hedge funds and publicly listed real estate investment trusts which buy up properties to be leased out as supported housing. The housing associations which deal with these funds have come under increasing scrutiny from the Regulator of Social Housing in recent months.
Luke Ellis, chief executive of Man Group, said that its private markets business is “a key diversifier” and that the company believes affordable housing “is an attractive asset class for long-term investors”.
It has established an advisory committee, which it said will guide Mr Alibhai on how to deliver an investment strategy that provides “both financial and social returns”.
Dame Katharine Barker, who authored an influential review of housing supply in 2004, will sit on the committee alongside David Hutchison, the chief executive of not-for-profit Social Finance, David Sheridan and David Gannicott, formerly of Keepmoat and Hyde respectively.
She said: “The UK is experiencing a housing shortage and there is an opportunity to make use of private, long-term capital to create affordable housing that meets the needs of communities across the UK in a socially sustainable way.
“I and the rest of the committee look forward to advising Shamez and the investment team as they progress with what we believe will be a successful example of public-private partnership and demonstrate the benefits of impact investing.”
The new fund’s interest in UK affordable housing was first reported by Bloomberg in January.
Mr Ellis added: “We are committed to helping our clients achieve positive financial and social outcomes with their capital and believe that affordable housing is an ideal strategy for this purpose.
“Shamez brings considerable expertise and prior experience of investing in affordable housing projects, and we are delighted that he has joined Man GPM. Our private markets business is a key diversifier for Man Group and we believe affordable housing is an attractive asset class for long-term investors.”
Update: at 8.33 on 26.2.19 This story was updated to correct the figure for Man Group’s assets under management.
