LGIM Real Assets (Legal & General) has provided £85 million in long-term financing to believe housing, one of the largest affordable homes providers in North East England.
26 Apr 2021
The private placement demonstrates Legal & General’s on-going commitment to a wider ESG and decarbonisation agenda, implementing a forward-thinking sustainability focused structure with pricing linked to the Company’s energy transition. The funding will support believe housing’s strategic development goal to deliver over 1,200 new affordable homes over the next five years.
The housing association’s 18,000 homes cover almost 900 square miles from the Durham coast to the Pennines. With LGIM Real Assets commitment, believe housing will use the funding to refinance existing debt, deliver new homes, and for general corporate purposes including investments in existing homes. believe housing has also recently become the first organisation in the sector to achieve the Carbon Neutral International Standard, demonstrating its commitment to reduce emissions and improve energy efficiency.
The delivery of believe housing’s pipeline of new homes will serve the communities in which it operates, as well as play an important role in the UK’s chronically undersupplied social housing sector – socially, economically and environmentally.
Covid has further highlighted the central role of the home in people’s lives, demonstrating the need for more good quality, stable, affordable homes. There is an urgent need to innovate within the social housing sector, to not only provide good quality buildings, but also to support the UK’s energy transition.
This marks LGIM Real Assets second recent partnership with a social housing provider operating in North East England, following its commitment to Bernicia last year. Aligned with its social purpose, Legal & General has over £1.5 billion invested in affordable housing to date in the UK. Bolstering its strong track record in the social housing sector, Legal & General continues its drive for inclusive capitalism, delivering social, economic and environmental value, and supporting the build back better initiative.
The investment has been made by LGIM Real Assets on behalf of its clients including Legal & General Retirement Institutional.
Steve Bolton, Head of Private Corporate Debt, Europe: "This is an important transaction for LGIM Real Assets, believe housing, and the housing association sector more broadly. We’re delighted to place decarbonisation firmly at the centre of the investment, rather than something that’s talked about on the side-lines.
Legal & General is uniquely placed to invest annuity money into the UK economy, supporting its long-term pension commitments and creating real assets which provide jobs, housing, and spur economic activity. The fundamental need for good quality, affordable homes has not changed. We are delighted to bolster our commitment to the social housing sector, and investment in the North East. believe housing marks yet another milestone for Legal & General’s backing for the North East, having recently committed £100 million and £350 million to landmark regeneration projects in Sunderland and Newcastle respectively."
Alan Smith, Executive Director of Investment, Growth and Performance at believe housing: "This funding will guarantee that our vision of a life without barriers can be brought to more people right across the region. It’s great news for us, and the affordable housing sector as a whole, that major private sector funders share our passion for doing the right thing for customers, for the business and in this case for the environment too."
Sohail Singal, Associate Director at Chatham Financial: "We are delighted to have led this transaction and supported believe housing on this ground-breaking private placement. The strong demand from investors during the bidding process is testament to believe housing’s unique credit story. Furthermore, the notes, which are sustainability-linked, will support their desire to grow and deliver a positive ESG impact and continue to change peoples’ lives."
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023
Legal & General Capital (LGC) is Legal & General Group’s alternative asset platform, creating assets for Legal & General Retirement and third-party clients in order to achieve improved risk-adjusted returns for our shareholders. LGC has built its capabilities in a range of alternative sectors, including in residential property; specialist commercial real estate; clean energy; alternative credit; and venture capital, which are all supported by long-term structural growth drivers, meet a financing gap and respond to a scarcity of supply that is underpinned by enduring societal needs.
Its purpose is to invest society’s capital for society’s benefit. Investing in the real economy and supporting the Group’s focus on climate and inclusive capitalism, LGC’s investments create jobs, change lives and contribute towards a net zero carbon future.
Legal & General has invested over £29bn in levelling-up regional economies, including through major UK-wide regeneration schemes and has recently made a commitment to enable all its new homes to operate at net zero carbon emissions from 2030.
*at 31 Jun 2021