Octopus Investments announces £150m Local Government Pensions Scheme investment into affordable housing 

We’re delighted to announce that we have raised a further £150m from a number of LGPS investors to invest in affordable housing. This includes co-investment commitments to build homes in specific geographic areas. 

The new commitments come from Avon (£50m), Gloucestershire (£50m), Devon (£40m) and Clwyd (£10m) LGPS and include co-investment to deliver affordable homes in specific geographic areas. This follows a £50m capital raise from London CIV, the investment pool for 32 of London’s Local Government Pension Schemes, and an additional £10m from Better Society Capital, the UK’s leading social impact investor. 

The capital raised last year has now been fully allocated to affordable housing projects, demonstrating our ability to deploy capital at pace with its own registered social housing provider, NewArch Homes. This includes acquiring 180 affordable homes from Maidstone-based Golding Homes in May of this year. This allows Golding to use the capital receipts to build more new affordable homes. 

Energy costs continue to disproportionately affect affordable housing tenants, so a key goal for Octopus is to build stock with close to zero energy bills. The links Octopus Investments has with its sister company, Octopus Energy, will enable more energy-efficient homes to be built to reduce resident outgoings. 

Jack Burnham, Head of Affordable Housing at Octopus, commented:

“We know there are a number of locally interested investors looking for opportunities to deploy capital into funds that can provide specific social impact to their local areas. We think this approach should be embraced and are thrilled to be working with Avon, Gloucestershire, Devon and Clwyd Pension Funds to help them deliver affordable homes in their areas or other areas across the UK.” 

Shaun Stephenson-McGall, Chair of Avon Pension Fund Investment Panel, said:

“We are delighted to invest £50m in affordable housing. This is broadly the equivalent of 250 new homes being built for up to 1,000 people. Critically, at least 20% will be in the Avon region. The new-build properties will raise the supply of secure, affordable, and energy-efficient homes for those who need them most. “

“We’re proud to have worked alongside Devon and Gloucestershire pension funds to get this investment over the line. This investment will help us meet our new net zero 2045 goals.” 

Phil Latham, Head of Clwyd Pension Fund, said:  

“Clwyd Pension Fund is delighted to partner with Octopus to deliver affordable housing across the UK. This collaboration matches our ambition of driving positive societal and environmental impact in the UK.”