Investment firm behind for-profit secures £123m despite ‘very difficult’ fundraising year

Mr Curtis said that the London-based firm does not have a target number of homes it wants, but in the medium term it is aiming to raise between £500m and £1bn, which will all be deployed into affordable housing. 

But he added: “It remains a very difficult environment this year as well, particularly in real estate.”

Savills IM, which is a sister company to residential advisors Savills UK, acquired a majority stake in the for-profit from corporate finance advisory firm Centrus in September 2022. 

The for-profit, which launched in 2020 as AAIM Housing RP, was initially focused on acquiring existing stock from housing associations. 

However Mr Curtis said that this approach had changed and that it is now also focused on helping to build new homes. 

“If we buy existing stock [from housing associations], that helps them recapitalise their balance sheet and therefore invest again in what they would like to do,” he said.

“But also if they’ve got a [development] project, and we can double or triple the size of it because we come in alongside them as an equity investor, then that allows them to do more.”

Keith Exford, former chief executive of Clarion and chair of Simply Affordable Homes, said: “One of the reasons for creating this vehicle was a recognition that housing associations have become almost entirely dependent on debt for pursuing their objectives, whether it be building new homes or meeting their other obligations. 

“We hope to be a vehicle which acts in partnership with conventional HAs to enable them to meet their obligations and strategic priorities, whilst we meet ours.” 

It follows a trend of other major investment firms moving into the sector in recent years, with some working with traditional HAs and others launching their own for-profits. Around three years ago, M&G partnered with G15 landlord Hyde, after registering its own for-profit. Hyde also entered a partnership with the investment arm of French insurance firm AXA, with the latter taking a 50 per cent stake in the association’s own for-profit RP, Halesworth, in 2022. 

Investment giants Man Group, Blackstone and BlackRock are also backing for-profit providers. 

Mr Curtis said that Simply Affordable Homes can operate all rented tenures including social rent, affordable rent, London affordable rent and London Living Rent. Shared ownership would also be looked at, he said. 

“We think there’s complementary characteristics between them from an investment point of view, which means that it’s nice to be able to do both,” he said.

Mr Curtis declined to name any housing associations or developers it is working with, but said: “We have a number of conversations with house builders and HAs which are ongoing and many relationships which we’ve built over the last few years.”

Ann Santry, former chief executive of Sovereign, and Jack Stephen, previously group finance director at Thames Valley Housing (now MTVH), are also on Simply Affordable Housing’s board. 

Centrus is no longer a minority shareholder in the for-profit, but Mr Curtis said it remains involved in the operation of the fund alongside Savills.

Hear from speakers including Peter Denton, chief executive of Homes England, and Christopher Osborne, head of real estate at London CIV, at the Social Housing Finance Conference on 8 May in London. For the full list of speakers and booking information, click here.