The Local Government Pension Scheme (LGPS) Access Pool has appointed Legal & General (L&G) as its social and affordable housing manager, with a commitment of £125m to manage its affordable housing strategy.

This commitment has launched the L&G Affordable Housing Fund, aimed at investing in affordable rent and shared ownership housing in areas of demand across England.

The fund will be managed by Legal & General’s asset management arm, aiming to deliver a diversified inflation-linked cash flow for investors.

The allocation resulted from a competitive process carried out by Apex Investment Advisory, launched in January 2024, following recent allocations by the pool to other areas of the private markets, including timber and infrastructure.

L&G's fund is intended to achieve environmental, social and governance (ESG) credentials, with ‘health and wellbeing’ and ‘equity and affordability’ as its core social priorities, aligned with L&G’s commitment to achieving net-zero carbon emissions by 2050 or sooner.

Commenting on the appointment, Access Joint Committee chairman, Mark Kemp-Gee, said this allocation marks yet another “key step” in Access’ initiative to diversify into the private markets.

“We have been impressed with L&G’s history of delivery in the affordable housing space over a long period and believe this investment partnership will provide robust, stable, long-term financial returns for our members alongside meaningful social benefits,” Kemp-Gee added.

L&G group CEO, António Simões, noted that the launch was an “important” step forward in putting pensions capital to work by investing in tangible assets that can help benefit the real economy and enhance local communities, arguing that with acute demand for affordable housing across the UK the public and private sector need to “work together to drive change”.

Adding to this, L&G Asset Management fund manager, Ali Farrell, said: “We are thrilled that Access has committed £125m which will directly increase the supply of affordable homes.

“With traditional housing associations facing financial pressures, institutional investors, like Access, are proving themselves as reliable partners in directing long-term pensions capital into areas that support society by unlocking more homes.

“We are excited to continue playing our part and look forward to welcoming new partners.”

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