On the go: The £36bn Pension Protection Fund has provided £65m of an £85m funding deal to refinance Monmouthshire Housing Association’s entire loan portfolio.
The investment is the PPF’s first direct investment in the UK social housing sector and was delivered with advice from Savills Financial Consultants.
The lifeboat’s funding, delivered through a 40-year private placement, will assist MHA in realising its development programme, while also supporting the housing association’s environmental, social and governance aims.
These aims go beyond increasing housing stock. MHA aims to cut carbon by a further 10 per cent across its portfolio by 2024 and help 30 of its tenants into work each year.
“We see strong alignment between this investment and our responsible investment strategy in creating positive social and environmental outcomes,” said Barry Kenneth, chief investment officer at the PFF.
“We’re pleased that our investment will support MHA’s continued focus on providing affordable housing to meet the growing needs of its local community, alongside the wider environmental and social benefits of this programme.”
The UK social housing sector is one of many areas the PPF has been considering as it looks for investment opportunities, which secure long-term sustainable returns for its members that are aligned with its investment objectives.
The investment will be managed in-house. The fund likes to manage assets internally for the greater degree of control it has over the portfolio and enhanced post-fee returns.
MHA’s existing lender, Barclays, is providing the remaining £20m of funding for the £85m deal via a revolving credit facility.
