Now: Pensions has made an investment into affordable housing in the UK, as part of its commitment to the Mansion House Accord.
This is the workplace pension provider’s first investment into private markets. The Mansion House Accord requires signatories to invest at least 10% of the default fund in private market assets, including at least 5% in the UK by 2030.
Now: Pensions says this investment will look to increase the supply of three types of affordable housing: regulated rentals, for people on the social housing waiting list and receiving a housing benefit; local affordable rentals, — designed for people priced out of the local rental market — and housing to be sold via shared ownership models.
Now: Pensions, part of the Cardano Group which is now owned by Marsh McLennan, said these investments are expected to improve member retirement outcomes by generating better returns while aligning with its ambition to make responsible, socially impactful investments.
It points out that the UK, there are over a million people on social housing waiting lists, and the average age of a first-time buyer has risen to 34 — an increase of 30 per cent since 2007. On average, in London, people pay 47 per cent of their disposable income on rent, versus 34 per cent nationally.
Chair of Now: Pensions board of trustees, Joanne Segars says: “This is our first investment into private markets. Investing in affordable housing presents an opportunity to generate strong financial returns for our members while contributing to a vital social need.
“The Now: Pensions trustee will continue to explore opportunities to expand its exposure to private markets, with a particular focus on sectors that offer strong growth potential and align with the long-term needs of our members.”
Now: Pensions director of investment Martyn James adds: “This investment is expected to provide complementary return drivers compared to more traditional parts of the growth portfolio, providing good diversification.
“Our investment strategy remains focused on delivering long-term value, and we are confident that our diversified approach, which includes an ambition of at least a 10 per cent allocation to private markets by 2030, will continue to benefit our members’ retirement savings.”
