Impact Real Estate – Social Housing
UK Endowment | 2021
Engagement at a glance
The client, a UK endowment, was looking to allocate GBP 20 million to Impact Real Estate, focusing on affordable housing. Although the client indicated a minimum return requirement of 8% per annum, its management team wanted to consider the full landscape of options.
The investor was looking for a strategy that would generate meaningful social impact without forgoing any financial return. This investor was comfortable investing in start-up managers and funds—and was willing to help shape the strategy if appropriate.
- Providing sub-strategy insight: the bfinance team worked with the client to evaluate the range of options available within the residential sector; topics included shared ownership, keyworker housing, homeless centres, supported living, care homes, etc.
- Analysing ESG and impact approaches: bfinance conducted in-depth analysis of various approaches to impact measurement and ESG processes, including the use of the Impact Management Project (IMP) framework.
- Providing full risk assessment: using quantitative modelling and analysis, the team provided systematic comparison of managers with regard to their ‘impact’ and investment risk.
- Delivering market expertise: in providing analytical resources to this highly experienced investor, bfinance was able to augment and expand the client’s own knowledge base.
- Offering a flexible search process: bfinance fast-tracked the evaluation of one fund that had a near-term final close date; three additional managers were shortlisted for consideration. The client selected one manager, with the understanding that it might opt to choose a second in six months.
Our specialist says
A combination of factors has led to a surge of interest in ‘impact’ investing, with increasing demand from clients for more general real estate impact strategies as well as more focused strategies, such as this social housing search. Within this space, we identified a range of strategies with respect to their types of ‘impact’ as well as their investment risks and returns. This search helped the investor understand the landscape of options, enabling its board of directors to become comfortable with the preferred sector (supported living/care homes) and a particular set of managers.