L&G secures £120m from major local government pension fund to boost affordable housing push

The new fund is part of L&G’s overall affordable housing strategy. Since its launch in 2018, Legal & General Affordable Homes (LGAH), which includes several for-profit registered providers, has invested around £1bn.

LGAH has around 5,000 homes in operation and a further 3,000 currently in development. 

L&G said that its new fund has a “strong pipeline” of housing through its affordable homes division.

The fund will operate a “direct leasing model”, which L&G said will mean “greater control, high-quality customer service” and less “counter-party risk”.

The fund is being managed by L&G’s asset management division.

Laura Mason, chief executive, private markets in L&G’s asset management division, said that the latest funding from GMPF “demonstrates the important role pensions capital can play in investing in tangible assets that we believe can benefit the real economy while seeking to deliver positive societal outcomes”.

She added: “With acute demand for affordable housing across the UK and with government signalling the delivery of more affordable homes as a top priority, the public and private sectors need to work together to drive change, and institutional investment has a pivotal part to play.”

Last month, a senior executive at LGAH said it was looking to acquire “problem” legacy stock from traditional housing associations as part of a new direction.