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Goldman Sachs enters UK social housing sector with Places for People loan

American multinational investment bank Goldman Sachs has entered the UK social housing sector with a loan to huge housing association Places for People.

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Jersey City skyline, including Goldman Sachs tower (picture: Getty)
Jersey City skyline, including Goldman Sachs tower (picture: Getty)
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American multinational investment bank Goldman Sachs has entered the UK social housing sector with a loan to the huge housing association Places for People #ukhousing

The 198,000-home association borrowed £50m in an unsecured loan from the bank, which has previously invested in affordable housing in the US but not in the UK.

Goldman Sachs also arranged €150m in bonds from European investors for Places for People, bringing, the association said, other new investors into the sector for the first time.


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Jeroen Rombouts, partner at Goldman Sachs, said: “We are pleased to have worked with the team at Places for People on this very important transaction, for the sector as a whole and for Goldman Sachs.

“I am pleased our team were able to bring solutions to the table which helped deliver financing at highly attractive rates, allowing Places for People to continue the important work of developing social housing in the UK.”

Goldman Sachs is the latest new entrant into the sector, which has seen an influx of international investors in the past few years, including the world’s largest property investor Blackstone.

Founded in 1869, Goldman Sachs is one of the largest investment banks in the world. It is a primary dealer in the US, meaning it buys government securities directly from the government.

Unlike many investors and investment bankers, it anticipated the sub-prime mortgage crisis of 2007/08, developing securities in 2004 to protect it from potential losses that amounted to bets on a sharp drop in US house prices.

In April it announced plans to invest £75m in modular housing manufacturer TopHat, which is currently developing processes to help digitise the construction sector.

Places for People said that these two transactions were part of its strategy to diversify its funding base. This has historically involved it borrowing money in euros as well as pounds, something that makes it unusual among UK housing associations.

In May the association issued another €150m worth of bonds from European investors, a move that allowed it to access cheaper funding due to the yields on the euro being lower than on the pound.

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