Edmond de Rothschild REIM closes £30 million subscription for investment in affordable homes

30th January 2023

Edmond de Rothschild Real Estate Investment Management, the Real Estate platform of the Edmond de Rothschild Group, announces that it has secured a £30 million commitment from Strathclyde Pension Fund into Funding Affordable Homes, a UK affordable housing fund.

Funding Affordable Homes invests in the UK affordable housing sector, with the objective of delivering an increase in the number of affordable homes, delivering positive social impact and providing attractive, stable and progressive returns to its investors. Helping to address the UK housing crisis, the Fund’s portfolio (valued at £133.9 million at 30th September 2022) currently comprises 768 existing homes across 10 projects, offering affordable homes to up to 1,300 people across the UK.

There are 1.6 million households (an estimated 3-4 million people) on housing waiting lists in the UK[1] with 278,000 households being statutorily homeless[2]. Whilst affordable housing completions have been increasing, over 60,000 are needed every year[3] – a level that has only been reached twice in the last 25 years[4]. With the UK population continuing to grow (it is expected to increase by c.3 million in this decade, surpassing 70 million by 2031[5]), a step change of affordable housing completions is required to address the supply-demand imbalance.

Funding Affordable Homes is an Article 9 “dark green” fund under SFDR classification and aims to deliver positive, tangible social impact through investment into, and development of, homes across the spectrum of affordable rent and ownership tenures. Working closely with The Good Economy, a leading specialist in impact measurement and management, the Fund follows an impact-focused strategy, with investments and developments having to deliver both appropriate financial returns and tangible, positive social impacts for its residents and the relevant local communities.

Edmond de Rothschild REIM expects to grow the Fund to more than £500 million, delivering 2-3,000 much needed affordable homes across the UK. It benefits from an experienced, specialist residential team and its broader vertically-integrated residential platform, which also includes private rental strategies across the UK.

Ian Jamison, Investment Manager at Strathclyde Pension Fund, said: “We are delighted to be able to provide a commitment to the Funding Affordable Homes strategy and to contribute towards the development of additional, much-needed affordable homes in the UK while also benefitting from attractive long-term returns for our pension members.  We were attracted to the track records and complementary expertise of the teams at Funding Affordable Homes and Edmond de Rothschild and are looking forward to working with them and potential other investors as the fund grows.”

Tim Holden, Head of Residential UK at Edmond de Rothschild REIM, said: “We are pleased to welcome Strathclyde Pension Fund into the Funding Affordable Homes Fund. The commitment is a significant step in the growth of the Fund and affirms our conviction that the UK residential sector continues to offer attractive opportunities for long-term investors seeking to achieve appropriate financial returns whilst delivering meaningful social impact by helping to alleviate the UK housing market shortage. We are continuing our efforts to secure further capital from domestic and international institutional investors to help deliver more homes for residents and local communities across the UK.”

Adrian D’Enrico, Fund Manager, Affordable Housing at Edmond de Rothschild REIM, added: “This is a positive step in the growth of Funding Affordable Homes and confirms our conviction that affordable housing offers a compelling opportunity for long-term investors such as UK institutions. With an acute affordable housing shortfall, there is an increasing acceptance that private capital can help deliver much needed new homes, whilst delivering long-term, inflation-aligned income streams. We look forward to swiftly deploying the newly committed capital against our strong pipeline of opportunities and further growing the Fund for the benefit of investors and residents alike.”

[1] NHF, People in Housing Need, 2020
[2] DLUHC Live Tables, 2022
[3] Savills – Building Through The Cycles, 2018
[4] DLUHC Live Tables, 2022
[5] ONS, Population Forecasts, 2020

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This document is issued by Edmond de Rothschild REIM.

In the United Kingdom, this document is exclusively directed at Investment Professionals and High Net Worth Companies as defined in The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and any other person to whom this document may lawfully be distributed under the Act. It is not intended for anyone in any jurisdiction where distribution of such document is not lawful.

Funding Affordable Homes SICAV SIF S.A. is reserved exclusively to professional and other well-informed investors as defined under Luxembourg law and might come with restrictions for certain persons and in certain countries.

The fund does not guarantee or protect the capital invested, so investors may not recover the full amount of their initial capital invested even if they retain their units for the recommended investment period.

Any investment in the fund involves exposure to certain risks and not limited to liquidity risk, concentration risk (Real Estate investments) and currency risk.

Any investment in Funding Affordable Homes SICAV SIF S.A. may in any event only be made on the basis of documents and information that comply prevailing regulations.