LGPS: Two schemes commit to Cheyne Capital's impact real estate strategy

Addressing the affordable housing crisis in the UK has been a focus for Cheyne since the launch of its Social Property Impact strategy in 2014; the aim is to provide affordable homes to lower-income and key worker residents and address the housing crisis, as well as providing affordable homes that go above and beyond any mandated affordable housing requirements. 

Cheyne Impact Real Estate builds housing both for general needs and specialist purposes with a significant number of its properties made available to residents at discounts.

All homes have capped rental increases to offer longer-term certainty for residents and affordable homes are provided on a voluntary basis, which means they are provided in addition to local authorities' mandated affordable housing requirements.

Cheyne has a cross-subsidy approach which means the discounted market rent is meaningful enough to remove the need for it to be increased at the full rate of inflation when the sources funding it may be increasing at sub-inflationary levels. 

Impact investing and the LGPS 

Stuart Fiertz, co-founder of Cheyne Capital and head of responsible investment said, “We are delighted that the solution we are offering both to tenants and to investors has resonated with Greater Manchester Pension Fund and South Yorkshire Pensions Authority, as well as with the London Borough of Newham. Thanks to their support, we will now be able to expand our portfolio elsewhere in the UK and we are excited at the prospect of announcing some of the future projects in our pipeline”.

Cllr Gerald Cooney, chair, Greater Manchester Pension Fund, added: “Our Impact Portfolio seeks to invest locally and create a positive impact, alongside generating a commercial return. I am proud that the Greater Manchester Pension Fund is supporting Cheyne Impact Real Estate and its effort to provide affordable homes for key workers in Greater Manchester."

George Graham, director of South Yorkshire Pensions Authority, said: "Helping to provide more affordable and specialist housing in the UK to those who need it the most in the current difficult economic climate. As an authority we are committed to place based impact investing and using our power as an investor, we can help and provide more homes in South Yorkshire and across the UK, while making the returns we need to pay our members’ pensions.”

Cheyne Impact Real Estate’s development in Manchester’s New Cross district will open its doors to residents later this month. This scheme contains 35 per cent of homes reserved for local key workers at rents which are calculated to account for no more than 30 per cent of the tenants’ net disposable income. With another two schemes due to complete this year, Cheyne is now working on similar projects in other regions of the UK.

The Pensions and Lifetime Savings Association, says impact investing “is something that a lot of schemes talk to us about”.