Schroders and Civitas Investment Management raise £100m for UK social impact strategy

Schroder Real Estate in partnership with Civitas Investment Management (“CIM”)  have reached a second closing on their closed-end private Social Supported Housing Fund (“SoHo”), bringing aggregate equity commitments raised to date to £100m.

SoHo will forward-fund the development of brand-new specialist supported housing in the UK, which has been purpose-built to provide safe, lifelong homes for adults with severe disabilities and significant mental health conditions.

Schroder Real Estate has been investing in UK real estate for almost 50 years. In the last few years impact investing has become integral to its investment philosophy and the SoHo partnership demonstrates how social impact can be achieved without the need to sacrifice financial returns for investors.

CIM, the leading impact investment manager which founded and acts as investment adviser to Civitas Social Housing REIT PLC, will oversee the development of the properties, drawing on its in-depth experience of providing bespoke supported housing for vulnerable adults with significant care needs.

The homes will enable these individuals to receive dedicated, high-quality care in the heart of their communities and live full, stimulating lives according to their individual capabilities.

The housing units already have planning consent and are pre-let on a long-term, FRI, CPI-linked basis to not-for-profit organisations.

The rental obligations are 100% funded by the local authorities in which the residents are located and ultimately paid by central government as part of its statutory obligation under The Care Act 2014.

It is well established that living in the community close to family and friends results in significantly better physical, mental and social outcomes for residents than institutionalisation or long-term hospitalisation.

This also provides better value for the taxpayer. The 2018 report by Mencap, ‘Funding Supported Housing for All’, found that specialist supported homes such as these cost 11% less than registered care homes and 55% less than in-patient alternatives.

Robin Hubbard, Head of Real Estate Capital at Schroders, commented:

“The fund was launched in 2019 and almost £50m of SoHo’s capital has already been allocated. The first project completed in July this year and further completions are now taking place each month. The strategy has proven highly resilient to Covid-19 and the Government-backed, strong cash yield on the long-term leases, as well as the clear social impact, are proving popular with institutional investors.”

Andrew Dawber, Group Director at Civitas Investment Management Limited, commented:

“This second closing is a major milestone for CIM’s partnership with Schroders. The £100 million raised will have a significant social impact creating brand-new, specially designed properties which will provide lifelong homes for the most vulnerable in our society, whilst producing an attractive return for investors.

"The fact that we have been able to close this latest fundraising successfully during the Covid-19 pandemic and resultant lockdowns is a demonstration of the attractiveness of this specialist asset class to institutional investors. CIM and Schroders are firm believers in the power of private capital to effect beneficial changes in society.”