UK. Legal & General completes first pension risk transfer deal for housing
Legal & General (L&G) has invested £100m of long term debt financing in its affordable housing business – opening the door for UK pension money to back the provision of such homes.
Secured against the income stream of a UK-wide portfolio of operational affordable housing, this represents its first deal to generate attractive matching-adjustment, compliant direct investments from affordable housing for its growing annuity portfolio. A further £175m of development finance is being provided by a consortium of external investors to support the delivery of its current pipeline of 3,500 homes. “We have already directly invested over £22bn into new homes, urban regeneration, clean energy and transport infrastructure.
“Bringing in pension fund capital gives us the scope to do even more – this is inclusive capitalism at its best,” said L&G CEO Nigel Wilson. L&G pitches itself as uniquely placed to invest annuity money into the UK economy with affordable housing seen as an appropriate asset for its Pension Risk Transfer business, offering a secure portfolio of inflation-linked rental income with the potential for long-term, diversified, stable returns.
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