Cheyne Capital has announced the launch of its second impact real estate fund, the Cheyne Impact Real Estate Trust, with initial dry powder of £150 mln (€170 mln) to be deployed in long-term, affordable housing in the UK.
The fund will focus on working with a mixture of councils, housing associations and charities from across the UK to provide affordable and keyworker housing as well as supported living facilities, care provision and mixed tenure developments.
The fund is evergreen and aims for a balanced approach to financial and social return with a view to generating a stable, long-term, inflation-linked dividend while creating positive social outcomes. It has been developed with specifically defined outcome objectives which form the basis of each investment and are monitored over the life of each one. It seeks to address at least three of the UN Sustainable Development Goals: Good Health & Wellbeing, Reduced Inequalities and Sustainable Cities & Communities.
Cheyne said that the team will shortly begin executing some of its advanced pipeline of £550 mln of investments which would deliver around 3,000 homes.
The fund follows the success of Cheyne’s pioneering Social Property Impact Fund which was launched in 2014 to help tackle the chronic shortage of housing solutions for disadvantaged groups in the UK. The first of its kind, its investments included landmark projects such as the mixed-tenure Elderberry Walk development in Bristol and Plait Court in Luton, a 100% affordable housing development built without any public subsidy, and Dun Works, a development of 225 homes in Sheffield, providing high-quality accommodation for keyworkers.
Stuart Fiertz, co-founder and president of Cheyne Capital, said: ‘Having been the first private sector investor to both build and buy impact real estate in the UK, we have seen first-hand how responsible private capital and the public sector can work together to increase the supply of affordable housing and build stronger communities. We have spent the past six years building up a broad network and pipeline and have the deep experience to help us continue delivering on our conviction that financial and social returns are not just complementary but will actually lead to superior outcomes over the long term. In these unprecedented times, it is more important than ever that we are able to offer our investors access to secure, long-term, inflation-linked cash flows.’
Ravi Stickney, head of Real Estate at Cheyne Capital, added: ‘The need for affordable housing and best-in-class accommodation for the public social care sector, coupled with the need for tenants to have security of tenure, is more urgent than ever. The UK has an estimated 5 million households in need of housing, yet only 50,000 new affordable homes are being created each year. There is also an acute lack of social care homes serving the public sector on affordable rents. We are proud to be able to increase the supply of genuinely affordable housing and care facilities as a long-term, responsible investor.’