Impact investment, whereby a fund creates beneficial social or environmental impact, has now grown to £76.8 billion in the UK in assets under management. Tens of thousands of new homes are set to be built across Britain funded by over half a billion pounds worth of impact investments announced today (Tuesday 15 October).

Coming the day after the Prime Minister announced £63bn of investment into Britain at the International Investment Summit, the commitment from three major financial institutions to invest for impact will directly tackle the most acute housing crisis in living memory, which includes at least 5,000 new homes to address social inequality. This supports the Government’s priority to get the country building again, creating more jobs and boosting the economy.  

The announcement comes as the Chief Secretary to the Treasury Darren Jones this morning hosts a roundtable with some of the biggest impact investors in the world, including Schroders, M&G, International Bank of America, Blackrock and Barclays, as the Government looks to create the right environment for impact investment across the country.

Chief Secretary to the Treasury Darren Jones said:

Investors tell us they want to help in delivering a better Britain. Working in partnership with government, social impact investing can change people’s lives and improve communities across the country.

We are dedicated to creating the right environment for impact investment across the country, and the announcement of over half a billion pounds worth of impact investment building tens of thousands of new homes is a great example of the change that we are delivering on.

Culture Secretary Lisa Nandy said:

These new funds provide a much-needed, fresh opportunity to work in partnership with impact investors, tackling some of the most pressing social and environmental challenges while driving economic growth.

We want to make the UK a world leading centre of excellence on the impact economy and look forward to working with the sector to unleash its full potential for our country.

These three investments funds by Schroders, Man Group and Resonance are exemplars of private capital responding to major social and environmental challenges, delivering returns while also helping to grow the economy, the government’s central mission. Today’s £550 million impact investment underpins the government’s drive to foster public-private partnerships to drive meaningful impact across the country.

Schroders, one of the UK’s largest investment managers, has today confirmed a new £50 million allocation from Homes England, into its recently launched real estate impact fund. The fund, which has an initial target of raising £200m with the aim of ultimately delivering 5,000 homes to address social inequality and deliver an appropriate financial return to investors, expects to make its first investments before the end of 2024. It is focused on helping to deliver more social and affordable housing, regenerate town centres and invest in social infrastructure, in places where housing benefits from public transport, green spaces, schools and GP surgeries.

Man Group, a London-headquartered global alternative investment management firm managing $178.2 billion, has also announced a further £100mn investment to deliver affordable and environmentally sustainable housing for communities across England, with 90% of homes to be designated as affordable housing. The investment will have a particular focus on delivering homes with a low carbon footprint and addressing the housing needs of key and essential workers.  This investment programme builds on the £385mn that has already been committed to affordable housing since 2021.

Leading social impact property fund manager Resonance have today announced an expected 300% increase in investment – from £79m to £250m – into its initiative to tackle homelessness. This directly channels investment into residential property to help create pathways out of Temporary Accommodation for individuals and families. Resonance has set a target of reaching £1bn investment in this area in the next five years, so it can work directly with local authorities and housing partners across the country to help provide people at risk of homelessness with a stable home.