Audit-style report into Cheyne Capital’s Impact real estate strategy results in ‘best-in-class’ moniker

Cheyne Capital, the alternative investment manager which was a first mover when it launched its debut Social Impact Property strategy in November 2014, has received a complimentary report from The Good Economy (TGE), an impact advisory firm.

The London-headquartered company has regularly conducted audits from third parties to 'measure the impact it is having' and that progress is being made by its strategies.

According to the company, TGE has finished the first annual social impact report of Cheyne Impact Real Estate, ‘confirming that the strategy is not only meeting its impact objectives but embodies a best-in-class approach to increasing and accelerating the supply of affordable homes'.

The issue of audits and oversight of alterantive investment firms when it comes to their cliams regarding ESG credentials was thrust into the spotlight last week when it emerged DWS and its majority owner, Deutsche Bank had been raided by authorities in Frankfurt amid “greenwashing” accusations.

TGE’s audit of Cheyne Impact Real Estate appears to involve mainly the “Social” part of ESG but also includes a sustainability element.

Cheyne said its impact strategy began in 2014 when it started to build or buy property for use as affordable or specialist housing. Current projects include a portfolio of homes for tenants with learning disabilities; a development in Manchester with a significant proportion of homes let to local keyworkers at discounted rents; and a 'pioneering approach' to care homes which provides affordable beds to residents nominated by local authorities or the NHS within newbuild care homes.

The strategy aims for a ‘balanced approach to financial and social returns with a view to generating a stable, long-term, inflation-linked yield while creating positive social outcomes’.

Cheyne and TGE have designed an impact measurement and management methodology to assess success.

The report concluded Cheyne Impact Real Estate:

• ‘embodies a best-in-class approach to increasing and accelerating the supply of affordable homes. It has done so without taking on grants or buying section 106 housing that would have found an alternative buyer and would not deliver the same impact’
• ‘homes are of a good quality, particularly the new-build homes. These are being built to meet external certification of above-average sustainability standards’
• ‘ensures that its mixed tenure schemes are 'tenure-blind' with no differences in the quality of design or customer service between private and affordable housing’

Stuart Fiertz, Cheyne Capital's co-founder, president and head of responsible investment, said: ‘Rather than abating, due to ongoing geopolitical issues and rising inflation, the UK's affordability crisis is currently more acute than ever. We are therefore proud to read The Good Economy's endorsement of Cheyne's Impact Real Estate strategy and to know that not only are we providing additional affordable homes, but also that our approach is having a meaningful impact: it is improving the quality of life of residents.’

Andy Smith, head of housing impact services at The Good Economy, said: ‘Cheyne have taken steps to ensure that impact is considered throughout their investment process, and have sought out an independent view of their Impact. We consider this combination of intentionality and transparency to be essential for all Impact Strategies.’

Audit challenge 
The challenge for real estate and all investment firms is that in order to provide audits of ESG credentials, it seems sometimes a plethora of third party firms is needed.

In an example, Nordic investor, CapMan, recently published its sustainability report for 2021/2022, which covers the company’s approach to the integration of ESG factors in the investment process, the setting of targets for the company and its assets, and the progress in meeting those targets.

The company used no fewer than six different companies.



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