The Welsh Pension Partnership (WPP) has confirmed a £30m deployment to support housing developers deliver much needed new homes.
The WPP, a collaboration of eight local government pension funds in Wales, has appointed specialist development and bridge lender Pluto Finance to manage £30m of its capital to back developers, particularly SME companies with a focus on delivering affordable homes.
An undisclosed element of the £30m has been ring fenced to back new housing projects in Wales, with the remainder assigned to Pluto’s Ƶ-wide lending activities, which are mainly residential property developer related, but with some commercial. However, Wales has and will continue to benefit from its main Ƶ fund investment activities.
Pluto is confident that the £30m can be deployed this year with the first deals expected shortly. The interest it will charge developers on issued debt and its own margin have not been disclosed.
The average loan length will be between one and three years, after which the capital will be recycled into new projects. Since being established in 2011 Pluto vehicles have lent over £3bn, facilitating the development of more than 12,000 new homes across the Ƶ.
Its loan book is funded by major institutional investors, including pension funds, local government pension schemes and insurers. Universities Superannuation Scheme, the Ƶ’s largest pension scheme, is also an investor and a part owner of the business.
Pluto said it has a strong reputation in the marketplace, highlighted by a 68% repeat borrowing rate. It said it has consistently delivered high single to low-double digit net returns to its investors across the market cycle. It wouldn’t comment on the possibility of further capital deployments from the WPP.
Councillor Elwyn Williams (chair of the joint governance committee), on behalf of the WPP said: “The partnership is committed to providing productive capital into Wales and we are delighted to have found a solution that delivers both in financial and local impact terms. This investment made through our private debt allocator, Russell Investments, will look to support both the Welsh economy and the affordable housing needs of our local community.”
Ashley Manning-Brown, head of Ƶ investor solutions at Pluto Finance, said: “We are thrilled to be working with the Wales Pensions Partnership, to help them deliver a step change in local, affordable housing. By utilising our innovative approach to place-based investment, the WPP will be supporting local communities and their housing needs, while delivering investment and SME job creation in Wales.”
The WPP was established in 2017 and covers the local authority pensions pots (set up prior to local government reorganisation) of Cardiff and the Vale of Glamorgan, Powys, Torfaen, Rhondda Cynon Taff, Clwyd, Dyfed and Gwynedd
