Legal & General is teaming up with Patron Capital to target less mainstream property sectors.
The two companies said they agreed to the long-term strategy of investing in assets with a 鈥減ositive social impact鈥�.
The Perpetual Opportunities Partnership (POP) will initially focus on the UK and Ireland, with deals likely to be between 拢20m (鈧�25m) and 拢200m in size.
Legal & General Capital鈥檚 managing director Paul Stanworth said the initiative would 鈥渟ignificantly expand鈥� its pipeline of opportunities into 鈥渓ess congested areas of the market鈥�.
The partners said they would look for long-term, operational real-estate and infrastructure-backed investment opportunities with a positive social impact.
Patron Capital will be the primary originator and day-to-day investment manager, the companies said.
Legal & General said the link-up supported its strategy of being more involved in UK housing and infrastructure, aiming to provide long-term capital to the energy, housing, urban regeneration and alternative financing sectors.
Investments would be made by Legal & General Capital and Patron Capital as co-investors, but Legal & General Capital will be the majority stakeholder.
They said POP would have a perpetual life cycle, investing over the medium to long term.
鈥淏y taking a flexible, strategic approach to investing in housing and social infrastructure, we will not only offer our shareholders attractive risk-adjusted returns but also drive UK economic growth and contribute in a significant way to enhancing UK living standards,鈥� Stanworth said.
, L&G invested 拢252m in UK affordable housing 鈥� the largest direct investment by an institutional investor at that point 鈥� buying a 4,000-unit portfolio let to Places for People Homes.
Keith Breslauer, Patron Capital鈥檚 managing director, said the tie-up with L&G would allow the company to look at longer-term investments lower on the risk-reward spectrum.
This, he said, meant it would be able to act on more of the 鈧�9bn investment pipeline it reviews each year, he said.
