AEW launches its first placed-based impact solution in the UK

AEW, Natixis IM’s affiliate dedicated to real estate investment, announces the launch of its first place-based impact investing strategy.

The strategy plays to the strengths of real estate’s role as a provider of social and community infrastructure, combining investments focused on social and environmental impact. It has been seeded with a diversified £100m portfolio of UK assets comprising specialist supported living, key worker accommodation and care homes together with community and residential-led town centre regeneration projects that influence well-being.

This launch follows the receipt of approval by the FCA on the 26^th July and investors’ approval on the 31^st August to transition a former strategy into this new one, using existing portfolio of impact assets. The strategy will thus benefit from seven-year track record of investing in alternative sectors influenced by social and demographic needs, topping both the MSCI/AREF UK Long Income Open-Ended Property Fund Index and the MSCI/AREF All Balanced Funds Index over a five-year period last quarter.

The team is now actively looking to raise capital, targeting a range of investors, from institutional capital and local government pension schemes to private wealth. This investing strategy provides a bespoke real estate solution that addresses the place-based needs of the UK, in collaboration with local authorities, by increasing the provision of sustainable real estate with a social use value. This includes residential housing, care facilities, nurseries and leisure and community facilities.

The team will adopt an active management, core-style strategy and seek to generate a sustainable income stream and return for investors.¹ The Impact Framework is structured around the goal of improving real-world outcomes experienced by people, place and the planet. This means providing people in underserved locations with access to real estate; funding developments and refurbishments that service a societal need; and ensuring investments are socially and environmentally sustainable through prudent property stewardship.

Working with The Good Economy, a leading social advisory firm and specialist in impact measurement and management, the team has adopted a bespoke Impact Management & Measurement (IMM) system designed to align with the best principles of impact investing, the requirements of the Global Impact Investing Network (GIIN) and the UN Sustainable Development Goals.

Nick Winsley, Head of AEW UK, said: “The built environment has a huge influence on people’s everyday lives and the launch of our first impact solution provides investors with an opportunity to invest in a way that creates both a tangible positive social and environmental impact, whilst also seeking to achieve their return objectives.² Seeded with a portfolio of strongly performing assets, the strategy is already delivering on its social value and cashflow objectives and we are excited to grow from here.”