Why we invested: Man GPM RI Community Housing Fund

Our mission is to grow the social investment market to improve people’s lives in the UK. One of the ways we do this is by making investments into housing funds that are building a more inclusive market; providing safe, high-quality homes; and contributing to thriving communities.

Published

Written by

Gemma Bourne, Investment Director

Why is this needed?

High quality, affordable housing is in short supply – with 150,000 new affordable homes needed each year to meet demand [1]. There are rising levels of homelessness and many people are living in unsuitable accommodation for their needs. Home ownership is increasingly unaffordable, leaving many people in the private rental market with insecure tenancies. And where development does take place, it often has little regard for the existing community.

Our Investment into the Man GPM RI Community Housing Fund:

We recently invested £10 million into the Man GPM RI Community Housing Fund, which aims to deliver 3,500 new homes by 2026. At least 50% will be affordable (Social Rent, Affordable Rent, Key Worker Rent and Shared Ownership) with ambitions to reach 70%, and the new homes will be delivered to high environmental standards.

In my previous life working in urban regeneration, I saw how the number of affordable homes in a new development were often negotiated down in the planning process to the detriment of the local community. Conversely, this Fund is making a meaningful contribution to the UK housing crisis and has this mission embedded throughout the investment process.

Four impact characteristics that informed our decision to invest:

  1. Affordability for local communities: The fund calculates the rent or sales cost for the homes it provides by assessing the incomes of the local community and how much they can afford to pay. It also provides a range of affordable tenures to provide the right mix of homes and in the right location for the community – i.e. building homes that are close to local amenities, transport, or schools.
  2. The team has frontline experience: The fund team have previously spent many years working for Housing Associations in the affordable and social housing sector. This means that they have a greater understanding of current housing system challenges, as well as the needs of their partners/frontline customers - which is demonstrated by the fund pipeline of 12 projects and around 2,000 homes.
  3. They take impact management seriously: Each investment that the team makes is subject to an in-depth social and environmental under-writing process.
  4. The team is willing to be held accountable for the impact performance of the fund: - New Philanthropy Capital is a member of the fund’s Investment Committee and Sheffield Hallam University’s ‘CRESR’ will be undertaking annual impact audits which includes input from those living in the homes.

Backing funds that can reach scale and transform the market:

Our capital alone will not solve the UK housing crisis, which is why we invest in funds that can connect high impact business models to private and institutional capital. We are pleased to be investing alongside Man Group, several Local Government Pension Schemes and Homes England. These investors reflect growing demand amongst institutional investors for market-based investment opportunities that make a tangible positive social and environmental impact.

Through funds like the Man GPM RI Community Housing Fund there is no trade-off between impact and financial return, they are in lockstep. I am excited to be on this journey with Man, and I am looking forward to seeing how these investments add value to local communities rather than take it away.

[1] Crisis and NHF: Housing supply requirements across Great Britain: for low-income households and homeless people, November 2018.