UK workplace pension provider now:pensions has announced its first private markets investment with an allocation to UK affordable housing.
This marks a step forward in the pension provider’s commitment under the Mansion House Accord to invest at least 10% of its default fund in private market assets by 2030, including a minimum of 5% in UK-based investments.
Serving over two million workplace pension members, now:pensions, a part of the Cardano Group, said the investment aims to improve retirement outcomes through stronger long-term returns while aligning with its wider strategy to make responsible and socially impactful investment decisions.
The initial allocation is focused on increasing the supply of affordable housing in the UK, with capital targeted at regions experiencing the greatest need.
The investment will provide now:pensions with exposure to residential properties designated as affordable housing and is expected to deliver long-term, stable, inflation-linked returns. It will support the development of regulated rental homes for people on social housing waiting lists receiving housing benefits, as well as local affordable rental options for individuals priced out of the private rental market, and shared ownership schemes for those unable to afford homes at full market rates.
Joanne Segars OBE, Chair of now:pensions’ board of trustees, commented: “This is our first investment into private markets. Investing in affordable housing presents an opportunity to generate strong financial returns for our members while contributing to a vital social need. The now:pensions Trustee will continue to explore opportunities to expand its exposure to private markets, with a particular focus on sectors that offer strong growth potential and align with the long-term needs of our members.”
Martyn James, now:pensions’ director of investment, added: “This investment is expected to provide complementary return drivers compared to more traditional parts of the growth portfolio, providing good diversification. Our investment strategy remains focused on delivering long-term value, and we are confident that our diversified approach, which includes an ambition of at least a 10% allocation to private markets by 2030, will continue to benefit our members’ retirement savings.”
