Asset management giant Schroders is set to invest in affordable housing as part of a £400m mandate awarded by the Wales Pension Partnership (WPP).
Swansea is one of the eight Welsh local government pension schemes that have awarded the mandate (picture: Alamy)
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Schroders Capital’s real estate team will have up to £400m to invest in positive impact and local investments across Wales, including affordable housing, healthcare and schemes that generate local employment.
Investments will also target impact opportunities across the UK that “deliver positive social impact and decarbonisation strategies that support WPP’s net zero ambitions”, Schroders said.
Formed in 2017, the WPP is a collaboration of eight local government pension scheme funds: Cardiff and the Vale of Glamorgan, Swansea, Clwyd, Dyfed, Greater Gwent (Torfaen), Gwynedd, Powys and Rhondda Cynon Taf.
The local and impact real estate arm is part of an overall £2bn mandate awarded to Schroders by the WPP as part of its real estate investment proposition.
Schroders will develop an investment programme that uses fund investments and direct asset investments in UK impact strategies, with at least 50% of assets located in Wales.
The asset manager will also manage the UK core real estate strand, which will focus on the industrial, retail and office sectors.
Property investment firm CBRE has also been awarded a £500m mandate to establish a vehicle to invest in funds and direct assets internationally.
Elwyn Williams, chair of the WPP’s joint governance committee, said: “Real estate is a core asset class for the eight Welsh constituent authorities and these managers will provide the investments they need to meet their local strategic asset allocations.”
Sophie van Oosterom, global head of real estate at Schroders Capital, said: “Our clients and investors are increasingly demanding more from their real estate exposure and managers – they want to see a razor-sharp focus on sustainability, delivering positive impact and operational excellence to optimise long-term income and value.”
Schroders Capital’s real estate team currently has £22.1bn in global assets under management.
Access Pool, a group of 11 local government pension funds, recently named Legal & General (L&G) as its social and affordable housing manager.
The pool has provided £125m in funding to L&G to invest in affordable rent and shared ownership homes in areas of “acute need and demand” across England.
Shortly afterwards, L&G more than doubled the size of its Affordable Housing Fund with a £120m investment from the Greater Manchester Pension Fund.
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