London Treasury invests £30m in real estate debt
The London Treasury Liquidity Fund (LTLF), managed by London Treasury, has made a £30m investment into private real estate debt.
The investment will provide senior development and bridge lending across the UK, with a focus on affordable housing.
Pluto Finance, a UK specialist real estate private debt manager, will place the £30m investment.
Other investors include the Universities Superannuation Scheme, also a major shareholder in Pluto, pension funds and other institutional investors from across Europe.
The move will support SME housebuilders across the UK, and comes against the backdrop of the Government’s plan to deliver 1.5 million new homes in the next five years.
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Lending activity will be focused in London and the South-East. For example, a recent loan closing is to finance a housing association’s development of 91 affordable homes and one commercial unit in Dagenham.
London Treasury is an arm’s length subsidiary of the Greater London Authority. LTLF is designed for local authorities and public sector bodies who seek a higher level of return than the sterling overnight index average (SONIA) or an average money market fund.
LTLF offers investors with fluctuating cash-flows, which on their own could only invest in short-term instruments, the benefits of longer-term investment. The fund is currently open to new investors.
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“We expect this investment to deliver a secure risk-adjusted return in excess of the portfolio’s benchmark at the same time as supporting the construction of new housing stock,” Richard Tomlinson, deputy chief investment officer at London Treasury, said.
“As a fund, we are at an exciting stage. Our performance since inception in April 2023 has exceeded current benchmarks, and our operations have scaled sufficiently to welcome new investors who are eager to partner with us.”
Robert Swift, head of investor relations at Pluto Finance, added: “We are delighted to be working with the team at London Treasury and are aligned with their investment aim – competitive financial returns and the delivery of much needed affordable housing across the UK.
“In addition to new homes, lending in London and the South-East delivers local investment and SME job creation.”
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