Schroders, Man Group and Resonance have committed GBP550 million through impact funds which the government says: “Will directly tackle the most acute housing crisis in living memory”.
The announcement follows the International Investment Summit 2024 which took place in London this week and resulted in pledges of GBP63 billion in private investment to support the UK’s infrastructure, renewable energy and technology projects.
Schroders announced a GBP50 million allocation from Homes England into its Capital’s Real Estate Impact Fund. The fund, which has an initial target of raising GBP200 million with the aim of ultimately delivering 5,000 homes to “address social inequality and deliver an appropriate financial return to investors”, expects to make its first investments before the end of 2024.
Peter Denton, Homes England Chief Executive, says: “This is a brilliant example of how public and private sector organisations can get behind a clear and common aim – namely supporting social justice and thriving communities.”
Meanwhile Man Group will invest GBP100 million in affordable and environmentally sustainable housing for communities across England.
Finally social impact property fund manager Resonance will commit GBP250 million into residential property to help tackle homelessness. Resonance has set a GBP1 billion target by the end of the decade which it says will support local authorities and housing partners across the country to “provide people at risk of homelessness with a stable home”.
Culture Secretary Lisa Nandy says: “These new funds provide a much-needed, fresh opportunity to work in partnership with impact investors, tackling some of the most pressing social and environmental challenges while driving economic growth.”
The government also unveiled significant investments in renewable energy projects including a GBP224 billion commitment to Scottish Power’s wind farms from Spanish firm Iberdrola over the next four years.
Further, Octopus Energy have committed to a GBP2 billion investment in renewable energy generation, including four new solar farms.
Despite declarations of success from UK government following the Summit, there are some who claim the event was a “publicity stunt”.
Douglas Grant, Group CEO of Manx Financial Group, says: “While we welcome the news and the shift in mood, the timing of Labour’s International Investment Summit raises some concerns. It feels like a classic publicity move, coming just two weeks before Labour’s first budget, which is expected to include tax hikes which will take some of the shine off the news.”
Grant questions the decision to “bundle all these positive investment deals together” calling it “contrived [rather] than the natural rhythm of investment”.
Meanwhile Oscar Warwick Thompson, Head of Policy and Regulatory Affairs at the UK Sustainable Investment and Finance Association, accuses Prime Minister Kier Starmer of “using sensationalist language around net zero”.
While welcoming the progress on investment in renewable energy, Warwick Thompson adds: “Also slightly concerning is the shift in political messaging around net zero. While the Prime Minister and his cabinet have been very positive about seizing the economic opportunities of green growth, Keir Starmer appeared to pit British industry against environmental progress, which is a false dichotomy.”
He continues: “The transition must be just, well-managed and in the interest of the public, but demonising climate activists for demanding progress borders on sensationalism. Mixed messages risk undermining the momentum of confidence the government has so far built behind the green transition.”
