First close for Savills IM’s UK Simply Affordable Homes Fund

Savills Investment Management has raised £123 million for the first close of its UK Simply Affordable Homes Fund, which will invest in and manage a diversified portfolio of affordable housing, social rent and shared-ownership homes.

Alex Jeffrey, Chief Executive, Savills IM

“The UK faces serious housing challenges, especially with regard to affordability, and this fund aims to help address this,” said Alex Jeffrey, chief executive, Savills IM. “Investing in UK affordable housing provides opportunities for institutional capital to meet commitments to socially responsible investing and make a significant and positive impact, whilst achieving attractive returns.”

The fund is an open-ended core product designed for institutional investors seeking a low risk, inflation-linked income stream whilst also delivering social impact. The fund’s five founding investors are Samsung Life Insurance, London CIV, Big Society Capital, Schroder BSC Social Impact Trust and Savills plc.

“Private capital has a vital role to play in the affordable housing sector, and we are confident that Savills IM will deliver robust long term returns for our partner funds, and through its impact-led approach support the provision of much needed affordable homes in the UK,” said Christopher Osborne, head of real estate at London CIV. “We’re excited to be an anchor investor in Simply Affordable Homes.”

Simply Affordable Homes RP Limited, the fund’s for-profit registered provider, will enable it to purchase existing income-producing stock through establishing strategic partnerships with housing associations and other registered providers, freeing up capital for them to develop more homes.

The fund will also facilitate the delivery of new homes and through strategic partnerships with developers and housebuilders to help create much needed affordable accommodation in the UK.

With an aim to facilitate a genuine social purpose with a positive impact, the fund operates under enhanced governance frameworks and a sustainable investment strategy.

The fund has a ‘Theory of Change’ impact framework, designed in conjunction with The Good Economy (TGE), a social impact advisory firm, as well as a targeted carbon reduction pathway with a series of commitments, targeting high environmental standards and progressing towards Net Zero Carbon by 2040.

“Our sourcing platform has multiple links to the existing sector and, through our strategic partnerships with Housing Associations and other private developers, we hope to deliver much needed capital into the sector,” said Dominic Curtis, fund manager and chief executive, Simply Affordable Homes RP.