Equity commitments have been secured from Greater Manchester Pension Fund, Better Society Capital and Places for People Group, with Greater Manchester Combined Authority providing debt finance.
- Initial £40 million raised for place-based, impact strategy, which will deliver affordable, new build, critical essential worker housing let at a discount to open market rents
- Delivery of homes will have significant local economic and social benefits, including creating local jobs, delivering infrastructure improvements, as well as improved living conditions and reducing cost of living pressures
- Thriving Investments’ second essential worker housing fund, and first in England, underpins ambition to launch similar strategies in a number of UK regions, using innovative public / private model
Thriving Investments, the socially conscious fund manager which is part of leading UK social enterprise Places for People (PfP) Group, has secured an initial £30 million of equity commitments from Greater Manchester Pension Fund (“GMPF”), Better Society Capital (“BSC”) and Places for People Group, for its newly formed New Avenue Living Greater Manchester Housing Fund (the “Fund”). With the Greater Manchester Combined Authority (“GMCA”) providing an initial £10 million loan, the Fund structure provides a blueprint for how public and private capital can work together to deliver place-based impact projects across the UK.
The Fund has a mandate to deliver high quality, sustainable, affordable homes for rent in the Greater Manchester area, outside typical grant funded / S106 stock. These homes will be let to essential workers (someone who works in a role that is deemed vital to the day-to-day running of the local community) at a discount, capped at a maximum rental level of 80% to open market rents, enabling them to access quality, safe, long-term accommodation, thereby providing real social impact to local communities.
A shortage of quality, affordable housing in Greater Manchester, the UK’s second largest regional city, has seen open market rents increase by 27.5% over the past two years, significantly ahead of other regions in England and Wales. A family in Manchester earning on the 25th percentile (and needing two beds or more) could afford just c. 5.5% of homes rented in 2023, highlighting the scale of the challenge.
Leveraging its in-house, vertically-integrated rental housing platform and extensive relationships with national and regional housebuilders, Thriving Investments is targeting a £200 million, 1,000-home portfolio over the next three years, through a mix of forward funding and forward purchase structures. Touchstone Property Management, the specialist property management business of PfP Group, will manage the completed homes.
The Fund is Thriving Investments’ second essential worker rental housing strategy, addressing one of the most pressing societal issues facing the UK today, whilst also generating attractive long-term CPI linked returns for institutional investors. Its award winning, £220 million New Avenue Living Fund in Scotland, launched in 2018, will deliver 1,200 much needed essential worker homes. Thriving Investments’ ambition is replicate the strategy under the established ‘New Avenue Living’ platform brand across a number of key regional UK cities at scale.
Thriving Investments will partner with local SME developers to deliver schemes of between 50-150 homes as part of the Fund’s place-based impact thesis to support local economies. In line with its wider commitment to create and regenerate residential-led communities through both an environmental and social lens, every home will have an EPC B or higher rating. Additional social impact and ESG metrics (core to the investment thesis) have been adopted to measure local community impact by way of apprenticeships, training, brownfield land regeneration and community contributions.
Cath Webster, Chief Executive Officer at Thriving Investments, commented: “Far too many essential workers, who make a huge contribution to the UK economy and society, are struggling to secure long-term, quality, safe housing, which acts as a catalyst to employment, health and education, and is the foundation of strong communities. This new Fund is our first essential worker housing strategy in England and reflects the team’s expertise in finding solutions to the challenge the UK faces in delivering genuinely affordable rental properties, at scale, in critically undersupplied regions.
“In the Greater Manchester Pension Fund, Better Society Capital and Greater Manchester Combined Authority, we have partners that share our responsible, value-driven investment approach, and their backing is a strong endorsement of our vision to marry institutional capital and public funding via strategic partnerships to help solve the housing crisis. They recognise the uniqueness of our vertically integrated rental housing platform, which enables us to source, fund, develop and manage new homes, and has enabled us to grow our assets under advisory to over £1 billion on behalf of a range of UK pension funds and institutional capital partners.”
Paul Dennett, Deputy Mayor for Greater Manchester and GMCA Portfolio Lead for Housing First, said: “This Fund is a prime example of how we’re working together with the Greater Manchester Pension Fund and the private sector to tackle one of the biggest challenges facing our city-region: ensuring people have access to safe, decent, and genuinely affordable homes. We know that far too many essential workers, the backbone of our communities, are being priced out of the places they serve. That’s simply not right.
“In Greater Manchester, we’ve been clear: housing is a fundamental right, not a privilege. Through bold, innovative partnerships like this, we’re showing how public and private capital can be mobilised to deliver real social impact. By investing in high-quality homes at affordable rents, we’re not just helping key workers find somewhere to live, we’re supporting local jobs, regenerating communities, and making sure economic growth works for everyone.
“This investment directly supports the government’s ambition to boost housing supply and deliver fairer, more inclusive growth. But here in Greater Manchester, we’re going further - driving forward a vision where housing is about providing security, stability, and opportunity for the people who keep our communities running.”
Greg Reed, Chief Executive Officer at Places for People, commented: “There’s no silver bullet in tackling this housing crisis. We need to be agile and innovative, and leverage opportunities that bring forward new housing schemes that cater to the needs of the communities we serve. This solution by Thriving Investments is another example of how we are disrupting the market to develop and nurture thriving communities. With PfP’s foundations built in the North West, it is a natural fit for us to recommit ourselves to one of our heartlands with our investment into this fund.”
Councillor Eleanor Wills, Chair of Greater Manchester Pension Fund, commented: “Our Impact Portfolio seeks to invest locally and create a positive impact, alongside generating a commercial return. I am proud that the Greater Manchester Pension Fund, alongside Greater Manchester Combined Authority, is supporting Thriving Investments and its effort to deliver affordable essential worker housing in Greater Manchester. The strategy supports the government’s plan to provide much-needed affordable homes for hardworking families while ensuring strong, low-risk returns to secure the pensions of our members.”
Marie-Alix Prat, Investment Manager, Better Society Capital, said: “With cities becoming increasingly unaffordable, this investment seeks to provide new high-quality, affordable homes for essential workers in Greater Manchester, allowing them to live closer to their workplaces. We're excited to collaborate with Thriving Investments, GMCA, and our co-investors to implement this innovative funding model in Manchester, while also supporting Places for People in delivering more affordable homes.”
The GMCA is made up of the ten Greater Manchester councils and Mayor, who work with other local services, businesses, communities and other partners to improve the city-region.
GMPF is the largest LGPS fund and the eleventh biggest defined benefit pension fund in the UK, providing valuable pensions and benefits to over 414,000 members. Through the Local Investment portfolio, as at Dec 2023, GMPF had investments of £172.7 million into nine funds, that have collectively invested in over 3,500 homes.
Better Society Capital is the UK’s leading social impact investor, with the mission of growing the amount of money invested in tackling social issues and inequalities in the UK. Since 2012, it has helped to build a market that has directed more than £10 billion into social purpose organisations tackling issues from homelessness and mental health to childhood obesity and fuel poverty.