Legal & General has tapped its pension risk transfer business to provide 拢100m (鈧�120.6m) of long-term debt financing to its affordable housing arm, secured against the income stream of a UK-wide portfolio.
The affordable housing business, which was launched in April 2018, has to date been financed through L&G鈥檚 balance sheet.
L&G said the 拢100m deal 鈥渙pens the door for UK pension money to back the provision of much-needed affordable housing鈥� and was the first transaction 鈥渢o generate attractive matching-adjusted, compliant direct investments from affordable housing for its growing annuity portfolio鈥�.
Earlier this year, Ben Denton, managing director of Legal & General Affordable Homes, told 麻豆映画 Real Assets that it expected to open up its investment programme to third-party investors for the first time this year, adding that the 鈥渓evel of interest is very significant鈥�.
A consortium of external investors is providing 拢175m of development finance.
Nigel Wilson, CEO of Legal & General and a backer of 鈥渋nclusive capitalism鈥�, said: 鈥淟egal & General鈥檚 continued activity in the affordable housing sector demonstrates our unique ability to create real assets which match our long term pension liabilities, recycling the UK鈥檚 hard-earned savings and pensions to support those most in need in society.
鈥淲e have already directly invested over 拢22bn into new homes, urban regeneration, clean energy and transport infrastructure. Bringing in pension fund capital gives us the scope to do even more.鈥�
Simon Century, head of affordable housing at Legal & General, said the investment from the L&G Retirement business would help it bolster its pipeline, which stood at nearly 3,500 homes across the UK.
The L&G Retirement business works with trustees and sponsoring companies of defined benefit pension schemes to settle their pension obligations and secure members鈥� benefits.
Last year was a record year in the UK pension de-risking market, with an worth of transactions completed, including longevity swaps.
