Allianz Global Investors (AllianzGI) has created an equity housing fund to offer UK pension funds inflation-linked yields.
AllianzGI鈥檚 Home Equity Income Strategy plans to raise an undisclosed amount of capital from its institutional clients to support the launch of Wayhome, a form of gradual homeownership without a mortgage in the UK.
The manager said the capital raised from investors will allow Wayhome to acquire homes with aspiring homeowners who are unable to purchase their own home through traditional ways of buying a home.
Wayhome鈥檚 model enables customers to part-own, part-rent a property. Customers can purchase with as little as 5% deposit, and then rent the rest. They can then buy more of the property, reducing their rent, whenever they want.
The manager said the partnership with Wayhome will open up a new market for institutional investors, 鈥渙ne that aims to offer reliable, inflation-linked yields that suit the cash-flow profiles of defined benefit pension funds, whilst helping more aspiring homeowners get on the property ladder鈥�.
Irshaad Ahmad, head of European institutional at Allianz Global Investors, said: 鈥漌e did it with infrastructure debt and now we plan to do it again through Wayhome鈥檚 gradual homeownership model.
鈥漌e continue to see significant institutional investor demand for the type of cash-flow matching that this partnership with Wayhome is set to provide.鈥�
Hugh Boyle, CEO Wayhome, said: 鈥淥ur partnership with AllianzGI means 鈥榬eluctant renters鈥� 鈥� those who would prefer to own their own home - will soon have a new way to homeownership, without a mortgage.
鈥淎llianzGI鈥檚 involvement will help us unlock the institutional financing we need, to open a path to homeownership for hard-working families, like those currently paying off somebody else鈥檚 mortgage.鈥�
A previous version of this story incorrectly referred to the Home Equity Income Strategy as an equity loan-style UK housing fund
