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.