Homes England has contributed £80 million to the Newstead SME Real Estate Lending Fund’s first close, together with the Greater Manchester Pension Fund, the publicly traded wealth management Mattioli Woods, and other private institutional investors (RELF).
The Fund will be run by specialised fund manager Newstead Money, with a goal of growing it to £300 million in additional capital raised and providing $1 billion in financing during the Fund’s existence.
The Fund will enable the construction of more than 5,000 high-quality, reasonably priced, and efficient new homes across England, supporting Homes England’s mission to accelerate change in the housing market by bringing in new sources of institutional capital and diversifying lending channels to the SME housebuilding sector.
“This agreement is our latest intervention to provide SME housebuilders a channel to credit that may otherwise be inaccessible via conventional methods,” said Peter Denton, chief executive of Homes England.
Homes England prioritises establishing new institutional capital sources to assist SME home builders, and our cornerstone investment in this fund shows government support for easily available and competitive financing to meet the requirements of SME developers nationwide.
We are eager to collaborate with our new partners and welcome further institutional funding to expand this fund and provide SME housebuilders with the support they need to construct more high-quality houses in our areas.
The Fund will assist in encouraging the development of sympathetic and ecologically responsible projects, promoting the local SME home building industry, and enhancing regional employment creation by empowering smaller regional housebuilders.
Greater Manchester Pension Fund Chair Councillor Ged Cooney stated, “We are glad to support the Newstead residential RELF, which will enable local SME builders to develop smaller sites, which are sometimes disregarded by bigger housebuilders.
With the financial gain from our investment, GMPF will be able to fulfil its future pension commitments to its members while also addressing the housing problem.
The Fund uses a thorough underwriting procedure that is overseen by Newstead and incorporates its own credit, environmental, social, and governance (ESG) metrics. By taking into account new homes’ energy efficiency at the underwriting stage, the Fund will promote the development of sustainable housing.
“This is an amazing move for Newstead,” said Simon Champ, CEO of Newstead Capital. The first of its type, our fund. We are opening a channel for long-term institutional investors to enter a market that has hitherto been inaccessible.
The Newstead RELF is specifically intended to address the unmet need for funding from local homebuilders. The economy has traditionally depended on regional housebuilding to create a variety of smaller housing communities around the nation.
The fund provides wealth management, insurance, and pension organisations with a suitable long-term investment platform to help this important sector of the economy.
By satisfying this need, we will provide investors, taxpayers, and retirees in Manchester an alluring return while also enabling neighbourhood SME builders to compete against bigger home builders.
The Newstead RELF fund will enable the construction of newer dwellings, addressing the housing shortfall and assisting in levelling up by enabling the development of smaller plots with the ensuing environmental advantages.