Man Group launches into UK housing as part of impact investing drive

News25 Feb 2019Luke Cross

Global investment manager Man Group has confirmed its plans to launch into UK social and affordable housing, with a strategy that involves setting up its own registered provider.

Man Group is the world’s largest publicly traded hedge fund manager, running $114bn of capital across its various investment management businesses, and also known more widely for its sponsorship of the Man Booker Prize.

As reported by Social Housing earlier this month, Man Group becomes the latest major name to look to place equity into UK affordable housing, following the likes of Blackstone, Legal & General, CBRE Global Investors and Cheyne Capital.

Man Group has recruited Shamez Alibhai – who set up and led hedge fund Cheyne Capital’s social property impact fund – to a newly created head of community housing role, where he will oversee a new community housing team and deliver an investment strategy “that achieves the dual objectives of providing both financial and social returns”.

Mr Alibhai – who will also sit on Man Group’s Responsible Investment Committee – will be supported by a new advisory committee, which includes Kate Barker, leading housing economist; Dave Sheridan, former chief executive of Keepmoat; David Hutchison, chief executive of Social Finance; and David Gannicott, former group director of business development at Hyde Housing.

The team is set to work with UK councils and housing associations “to deliver additional homes to help meet the need for 2.5 million more affordable homes over the next 15 years”.

This would mean predominantly developing and building new community housing, rather than basing the model on bidding for existing developments and contracts, or becoming another player in the Section 106 market. It is understood that the strategy will focus on working in partnership with councils and housing associations to create new affordable homes, rather than seeking to compete with them.

It will work across a range of housing tenures from social and affordable rent, to shared ownership, Rent to Buy, and market rent and sale.

Man Group – a FTSE-listed company headquartered in London – was unable to comment on the specifics of any fund, including the levels of investment planned.

It is now working up an investment strategy, which it will deliver via Man Global Private Markets (Man GPM), its real and corporate assets business that launched in 2017 and had £2.3bn of assets in management at September 2018.

Luke Ellis, chief executive of Man Group, said its residential markets business is a “key diversifier” for the group, and that they believe affordable housing is “an attractive asset class for long-term investors”.

“The scale of the housing shortfall across the UK requires innovative solutions to enable all types of households to help meet their housing aspirations and needs. Man Group’s resources and commitment to socially responsible investing provide a strong foundation for pursuing our goal of alleviating this problem.”

Ms Barker – who was on the Bank of England’s Monetary Policy Committee between 2001 and 2010 and authored the influential Barker Review of Housing Supply in 2004 – said there is an opportunity to make use of private, long-term capital to create affordable housing that meets the needs of communities across the UK in a socially sustainable way.

“I and the rest of the committee look forward to advising Shamez and the investment team as they progress with what we believe will be a successful example of public-private partnership and demonstrate the benefits of impact investing,” she said.

Man GPM specialises in residential real estate and in the private rented sector. It has invested in 4,000 houses for rent and provides more than 13,000 homes.

Cheyne Capital, which launched its fund in 2014, revealed to Social Housing last month that it has deployed almost £1bn into housing and now expects to launch a second iteration of the fund.