L&G increases private credit exposure to housing associations
Legal & General (L&G) has increased its exposure to housing associations within its private credit portfolio, with a £75m investment into Cottsway Housing Association.
L&G’s asset management team invested on behalf of the group’s institutional retirement business.
L&G’s private credit portfolio manages around £18.6bn of investments on behalf of institutional clients globally, encompassing real estate debt, infrastructure debt, corporate debt and alternative debt.
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Housing associations represent a core part of L&G’s private credit portfolio, equating to a total investment of around £1.75bn.
“Cottsway, and other housing associations, have deep roots in communities across the country and play an integral role in tackling the housing crisis and we’re pleased to support them,” said Anna Szypkowska, investment manager, L&G Corporate Private Credit.
“Lending such as this is a prime example of how institutional investors’ long-term patient capital can deliver investments that benefit society for successive generations, increasing the supply of homes in the communities that need them most.”
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Cottsway develops affordable housing in West Oxfordshire, Gloucestershire, Wiltshire, and Worcestershire. It works in partnership with Homes England, a public body that funds affordable housing.
It will use the £75m investment predominantly to refinance existing bank debt at lower rates.
Over the next five years, Cottsway plans to invest around £150m in new developments which should deliver a further 833 homes to help address the housing crisis in the UK.
“Cottsway was introduced to L&G by Centrus, our Treasury Adviser,” said Richard Reynolds, chief executive of Cottsway.
“This funding is part a major re-finance programme for Cottsway which has allowed us to repay legacy debt and secures our corporate ambition to provide more homes in the communities we serve. We are delighted to have L&G alongside us and look forward to building a partnership for the future. We are also delighted to have been working with Centrus who have been a huge support.”
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Tom Archer, assistant director at Centrus, said: “We are delighted to have arranged this new funding between Cottsway and L&G. This transaction forms part of a wider refinance of legacy debt which has unlocked capacity and lowered interest costs, helping Cottsway to continue the great work that they do in their communities. It has been a pleasure to work with both Cottsway and L&G.”
