The LGPS fund’s investment will go towards building affordable housing in the north-west of England, as waiting lists for social housing continue to rise.
Greater Manchester Pension Fund (GMPF), one of the largest public sector pension schemes in the UK, has invested £100m (€118m) into the Legal and General (L&G) Affordable Housing Fund, which aims to address the UK housing crisis.
This latest place-based GMPF investment was made through a new regional “sleeve” to the existing L&G flagship affordable housing fund, launched in July 2024 to develop sustainable affordable housing nationally.
The new regional investment vehicle is tailored specifically for the Northern LGPS – of which GMPF is a member – to allow it to deploy capital into affordable housing development specifically in the north-west of England.
Last year, GMPF committed £120m into L&G’s affordable housing fund. Currently, there are 1.3 million people on local authority waiting lists for social housing, with 207,000 within the north-west alone, according to the organisations.
Housing crisis
The GMPF investment comes at a time when the UK government is increasingly encouraging investment from long-term pension capital to create affordable homes across the country.
”We are acutely aware of the severe housing crisis both nationally and in the north-west region. With record numbers of homeless children, the younger generation is being priced out of home ownership,” said councillor Eleanor Wills, chair of GMPF.
GMPF and L&G have had a longstanding partnership, one that Willis said the scheme is proud to continue as it launches “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.”
This latest partnership between GMPF and L&G comes as investors are becoming increasingly aware of the opportunities in local place-based investment in the UK.
Place-based impact investing focuses on directing investments to specific regions or communities to generate social, economic and environmental benefits locally, and could play a vital role in bolstering affordable housing in the country. According to an Impact Investing Institute report, the supply of capital seeking a place-based investment approach is increasing, while the enabling infrastructure to support it is being built.
Place-based strategy
Local investment has been a consistent part of GMPF’s strategy for over 25 years.
According to a report assessing its place-based impact strategy, GMPF allocates up to 5% of its investment value to local investments, with ‘local’ defined as Greater Manchester and the north-west of England.
Furthermore, GMPF has invested £172.7m, through its own Local Investment portfolio, into nine funds that have collectively invested in over 3,500 homes ranging from new-build apartments, through to affordable housing for low-income households at risk of homelessness, the report stated.
