Legal & General has engaged Patron Capital to originate and manage investments in property that provide a positive social impact.
The initiative, called the Perpetual Opportunities Partnership (POP), will initially focus on assets in the UK and Ireland that are stable, operationally geared, and have a positive social impact. The criteria for investment could include social housing, educational or healthcare facilities.
The partnership will have a perpetual life cycle, investing for the medium to long term, and is understood to be aiming to reach an initial £200m of deals.
Patron Capital is a real estate investment firm managing around €2.5bn of assets. The London-based outfit has previously worked with L&G on a joint deal to acquire Cala Homes, a UK house building group.
The strategy has been designed not to overlap with the opportunistic criteria of Patron's existing funds, nor L&G's existing property origination platforms. There is no constraint on deal size, but investments are likely to range between £20m and £200m of equity, the partners said.
"The tie-up with Legal & General will enable us to consider longer-term investments that are lower on the risk-reward spectrum, meaning we will be able to act on a greater proportion of the €9bn investment pipeline we review each year," said Keith Breslauer, managing director of Patron Capital.
L&G Capital, the insurer's principal investment arm, will make the investments and take a majority stake in the assets.
Paul Stanworth, managing director at L&G Capital, said the group "is committed to being economically and socially useful to our communities. We believe that by taking a flexible, strategic approach to investing in housing and social infrastructure, we will not only offer our shareholders attractive risk-adjusted returns but also drive UK economic growth and contribute in a significant way to enhancing UK living standards."
