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Pension fund invests £130m in South East housing association
The Pension Insurance Corporation (PIC) has completed a £130m debt investment that will help fund the development programme of a housing association in the South East of England.
Raven Housing Trust, which owns more than 7,000 properties across Surrey and Sussex, will use the funding to finance the development of 630 homes by 2026.
More than half (58%) of the homes will be for social or affordable rent, while 30% will be for shared ownership.
Raven selected PIC as the sole lender following a full market tender.
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The transaction has a range of maturities spanning over 30 years, with the maturity profile tailored to match PIC’s pension liabilities in years where it is difficult to source cash flows in the public bond markets.
The deal brings the total amount invested by PIC in the social housing sector since 2012 to £3.3bn.
PIC is also investing £130m in Wirral Waters One, one of the UK’s largest regeneration projects, and is spending £83m developing flats in east London to be leased by Newham Council.
Mark Baker, director of finance and governance at Raven, said that PIC’s investment will “help hundreds of families find much-needed accommodation”.
There are roughly 1,250 households on the waiting list for social housing in Raven’s largest local authority area, Reigate and Banstead, Mr Baker added.
Vladan Martinovic, debt origination manager at PIC, said: “The purpose of PIC is to pay the pensions of our policyholders over many decades, so by continuing to invest in long-dated, secure cash flows, such as our Raven investment, we are securely backing future pension liabilities.”
He added that PIC is “proud” to help Raven develop “much-needed homes”, while securing the pensions of policyholders.
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