Legal & General and Patron Capital set up new UK fund to invest in social real estate projects

 
Kasmira Jefford
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L&G boss Nigel Wilson wants to invest in long-term projects
Insurance giant Legal & General (L&G) has teamed up with private equity firm Patron Capital to invest in social real estate projects as the pair seek to tap into long-term opportunities in the UK housing sector.

Their new partnership Perpetual Opportunities will initially target projects in the UK and Ireland with a “positive social impact” such as town centre regeneration schemes and affordable housing, the pair announced yesterday.

Legal & General Capital, the insurer’s investment arm majority stakeholder in the partnership, with Patron acting as the day-to-day investment manager.

Investments are likely to range between £20m and £200m although POP has not been given a formal limit on the amount it can spend on a deal.

L&G has been investing heavily in infrastructure and social housing, with over £4.6bn spent in the year to date.

The insurer’s chief executive Nigel Wilson – City A.M.’s Business Personality of the Year – wants to commit a total of £15bn of “slow money” – or long-term investment – on assets such as student accommodation, hospitals and social housing that need years to develop.

“We believe that by taking a flexible, strategic approach to investing in housing and social infrastructure, we will not only offer our shareholders attractive risk-adjusted returns but also drive UK economic growth and contribute in a significant way to enhancing UK living standards,” L&G Capital’s managing director, Paul Stanworth, said.

The two firms joined forces last year to buy upmarket housebuilder Cala Homes from Lloyds Banking Group for £210m. Patron’s managing director said the tie-up will allow the firm to invest in projects that are usually too long-term for its existing funds.

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