Dealflow | December 2, 2020

Inclusio seeks to anchor its social mission by going public

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, December 2 – Brussels-based Inclusio develops and manages affordable housing, schools, reception centers for asylum-seekers and other social housing and infrastructure projects. Last week, it listed shares on the Euronext Brussels exchange, with the aim of raising about €60 million ($72 million).

Inclusio is one of the first impact finance products in the public markets.

KOIS, the Belgian impact investor that set up Inclusio in 2015 with Degroof Petercam bank and real estate developer Revive, said the IPO anchors the company’s mission by giving investors liquidity without the sale of its real estate assets.

“As such, you protect your inventory of buildings dedicated to social housing,” KOIS’s Francois de Borchgrave told ImpactAlpha. “It is critical for the social mission protection of Inclusio to go public.”

Inclusio’s European IPO is part of a broader wave of managers and companies tapping the public markets to raise capital for electric vehicles, green infrastructure, alternative proteins and other sustainability-themed companies. Bridges Fund Management, TPG, Revolution and Equilibrium Capital among others have leveraged special purpose acquisition companies, or SPACs, as an alternative route to public markets. Vital Farms, an Austin-based B Corp, listed on the Nasdaq this summer.

Last month, Schroders and Big Society announced a £100 million ($134 million) IPO for a social impact investment trust to acquire impact funds and debt portfolios.

With a public listing like Inclusio, “every single person is able to invest their capital into a fund in which societal and environmental impact is held to the same standards as profit,” de Borchgrave said.

Low-risk assets

Inclusio manages a portfolio of 62 properties valued at €141 million ($168 million). Belgium, like most countries, faces a deficit of affordable housing; Brussels has 49,000 households on its social housing waiting list, which currently stands at 10 years.

Affordable and workforce housing has is one of the most stable asset classes in real estate, with low vacancy rates and insatiable demand. In the U.K., the Ethical Housing Company raised capital to build more social housing in the country’s high-need northern region. U.S.-based Affiliated Development launched an impact fund to invest in workforce housing in Florida.