Schroders launches U.K. real estate impact fund with £10 million

ImpactAlpha Editor

Dan Keeler

ImpactAlpha, November 28 – U.K.-based asset manager Schroders Capital launched a new fund focused on investments in some of Britain’s most depressed regions with £10 million ($11.9 million) in seed capital. Schroders is looking to reach a £150 million first close early next year and is aiming to grow to £1 billion within three years.

The fund, which focuses on developing affordable homes and workplaces in depressed urban areas and repurposing mixed-use town centers, is targeting a 7-8% net return, said Schroders’ Chris Santer.

Closing the gap

One aim of the fund, said Schroders’ Sophie van Oosterom, is narrowing social inequality exacerbated by the Covid pandemic “in more deprived areas in the UK.”

“We have already identified an extensive pipeline of projects where we believe town centers can be repurposed and where we can deliver not just social housing, but mixed use and mixed tenant communities to bring vibrancy back into city center,” added Santer. 

Momentum play

Place-based impact investing is picking up steam in the U.K. In June, impact investor Bridges Fund Management stood up a £350 million property fund to invest in healthcare, low-carbon logistics and affordable housing.

And this month, property investment firm Orchard Street launched a £400 million impact fund to invest in decarbonization of buildings in its portfolio and in making the buildings healthier for tenants.