Innovative long-term development finance fund launched by investors
Homes England, along with Greater Manchester Pension Fund, as well as other private investors, have pledged £80m to the Initial Close of the Newstead SME Real Estate Lending Fund (RELF).
The fund is to be managed by specialist fund manager Newstead Capital, with the intention of growing the fund to £300m in capital raised, whilst delivering £1 billion in funding over the fund’s lifetime.
The fund will aim to deliver on Homes England’s aim to deliver change in the housing market by bringing new sources of capital and diversifying lending channels to the SME housebuilding sector.
The aim is also to assist in construction of over 5,000 high-quality, affordably priced, and efficient new homes throughout England.
Peter Denton, Chief Executive of Homes England, said:
“This partnership is our latest intervention to offer SME housebuilders a route to finance that may otherwise be unavailable through traditional means.
Introducing new sources of institutional capital to support SME house builders is a priority for Homes England and our cornerstone investment in this fund signals government support for accessible and competitive finance to meet the needs of SME developers across the country.
We look forward to working with our new partners and welcome further institutional capital to help grow this fund and give SME housebuilders the helping hand they need to get more quality homes built in our regions.”
Part of the scheme also aims to empower smaller regional housebuilders by encouraging the creation of sympathetic and environmentally responsible projects, whilst simultaneously encouraging regional house building projects, and providing job opportunities.
Councillor Ged Cooney, Chair of Greater Manchester Pension Fund, said:
“We are pleased to support the Newstead residential RELF, which will allow more new homes to be built, by empowering local SME builders to develop smaller sites, often overlooked by larger housebuilders.
These new homes will help to address the housing shortage and the financial return from our investment will enable GMPF to meet its future pension obligations to its members.”
Simon Champ, CEO at Newstead Capital, said:
“This is an exciting step for Newstead. Our fund is the first of its kind. We are providing a conduit for long term institutional investors to gain access to a market which until now has been out of reach.
The Newstead RELF is aimed exclusively at the unfulfilled need for capital from regional housebuilders. Regional housebuilding has historically been critical to the economy, providing the country with a diverse range of smaller housing communities. The fund gives pension, insurance, and wealth management institutions an appropriate long term investment platform to support this vital industry.
By meeting this demand, we will provide an attractive return for investors, the taxpayer and Manchester retirees, while also empowering local SME builders to compete with larger housebuilders. The Newstead RELF fund will allow more new homes to be built, tackling the housing shortage and contributing to levelling up by allowing smaller sites to be developed, with the associated environmental benefits.”
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