AEW launches UK Impact Fund
AEW has launched its first, place-based impact investing strategy, the AEW UK Impact Fund (UKIF).
UKIF is an open-ended fund that is seeded with a diversified £100 million (€117 million/$126 million) portfolio of U.K. assets comprising specialist supported living, key worker accommodation and care homes together with community and residential-led town center regeneration projects that influence well-being.
The launch of UKIF follows the receipt of approval by the FCA and investors to transition the AEW Real Return Fund (RRF) into the new strategy using RRF’s existing portfolio of impact assets. The fund will benefit from RRF’s seven-year track record of investing in alternative sectors influenced by social and demographic needs, with RRF topping both the MSCI/AREF U.K. Long Income Open-Ended Property Fund Index and the MSCI/AREF All Balanced Funds Index over a five-year period last quarter.
AEW is now actively looking to raise capital on behalf of UKIF, targeting a range of investors from institutional capital and local government pension schemes to private wealth. The fund provides a bespoke real estate solution that addresses the place-based needs of the United Kingdom, 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.
UKIF will adopt an active management, core-style strategy and seek to generate a sustainable income stream and return for investors. UKIF’s 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 fund 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.
“The built environment has a huge influence on people’s everyday lives and the launch of our first impact fund provides investors with an opportunity to invest in a way that creates both a tangible positive social and environmental impact, whilst also achieving their return objectives. Seeded with a portfolio of strongly performing assets, the fund is already delivering on its social value and cash flow objectives, and we are excited to grow the fund from here,” said Nick Winsley, head of AEW U.K.