The fund is targeting £200m and plans to build sustainable and affordable homes in Greater Manchester for essential workers being priced out of the region’s booming housing market.
UK-based Thriving Investments has raised £40m (€48m) for a place-based impact strategy aimed at delivering affordable housing to essential local workers in the Greater Manchester area. The homes will be let at a discount compared to rents paid on the open market.
The social impact driven fund manager secured an initial £30m of equity commitments for its newly formed New Avenue Living Greater Manchester Housing Fund from the Greater Manchester Pension Fund (GMPF), Better Society Capital (BSC) and Places for People Group. The Greater Manchester Combined Authority (GMCA), which is made up of all ten Greater Manchester councils and the Mayor, provided a £10m loan. The new fund is targeting £200m.
“This fund is a prime example of how we’re working together with the Greater Manchester Pension Fund and the private sector to tackle one of the biggest challenges facing our city-region: ensuring people have access to safe, decent, and genuinely affordable homes,” said Paul Dennett, deputy mayor for Greater Manchester and GMCA portfolio lead for Housing First.
Manchester Mayor Andy Burnham has pledged to build 75,000 new homes to ease the housing crisis in the period until the next UK general election in 2029.
“The £10m loan to Thriving Investments to support the delivery of affordable homes for essential workers is an innovative approach that sees public sector investment being used alongside the pension fund to drive the provision of affordable homes, which is fundamental to delivering our strategy,” a GMCA spokesman told Impact Investor.
Pension funds
The launch of Thriving’s place-based impact strategy comes at a time when the UK government is increasingly encouraging pension funds and other institutional investors to invest in the construction of affordable homes. In 2024, the median average home in England stood at £290,000, which was 7.7 times the average earnings of a full-time employee, according to the UK Office for National Statistics.
“The strategy 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,” said councillor Eleanor Wills, chair of the GMPF, which is the UK’s biggest local government pension scheme with more than over 414,000 members.
As previously reported by Impact Investor, the GMPF said in January it had invested £100m into the Legal & General Affordable Housing Fund, which aims to address the UK housing crisis. Local investment has been part of GMPF’s strategy for more than a quarter of a century.
Soaring rents
Market rents in Greater Manchester have jumped 27.5% over the past two years, which is well ahead of other regions in England and Wales.
“Private rents are increasingly unaffordable for essential workers, pushing families further from work or into poorer quality homes with access to workers for societal essential roles in urban centres under threat. Our mission is to create quality affordable homes and communities where essential workers can thrive, not just survive,” Cath Webster, CEO at Thriving Investments, told Impact Investor.
The launch of its second essential worker rental housing strategy comes seven years after Thriving Investments started a similar fund in Scotland. The £220m New Avenue Living Fund Scotland has delivered 742 new affordable homes to date and is on track to deliver its target of around 1,200 homes for workers considered vital to the day-to-day running of the local community, Webster said. The Scottish fund will regenerate over 37 acres of brownfield land at the heart of existing communities, she added.
Thriving Investments said it plans to leverage its rental housing platform and relationships with national and regional housebuilders, to create a £200m, 1,000-home fund portfolio over the next three years for its second fund.
The firm is “open” to speaking with institutional investors, including Local Government Pension Schemes, to facilitate further equity fund closes over time to grow its social impact led investment approach, Webster said.
Strategy roll-out
The fund manager will work with local SMEs to deliver schemes of between 50-150 sustainable homes, as part of the fund’s place-based impact thesis to boost local economies. It has also adopted social impact and ESG metrics to measure local community impact by way of apprenticeships, training, brownfield land regeneration and community contributions.
Thriving Investments plans to roll out the strategy under its ‘New Avenue Living’ platform brand across a number of key regional UK cities at scale.
“There’s no silver bullet in tackling this housing crisis. We need to be agile and innovative, and leverage opportunities that bring forward new housing schemes that cater to the needs of the communities we serve,” said Greg Reed, CEO of Places for People.
“With cities becoming increasingly unaffordable, this investment seeks to provide new high-quality, affordable homes for essential workers in Greater Manchester, allowing them to live closer to their workplaces,” said Marie-Alix Prat, investment manager at BSC, a UK social impact investor which has directed more than £700m into social investments since its foundation in 2012.
