Edmond de Rothschild REIM raises GBP155m for residential funds

Edmond de Rothschild Real Estate Investment Management (REIM) has raised GBP155 million of equity at the latest closes of its two UK residential investment funds, which are focused on delivering a positive social impact.

The Edmond de Rothschild Residential Investment Fund UK, which invests in the private rented sector (PRS) with a focus on need and affordability, has raised GBP135 million from European institutional investors following its second close. Funding Affordable Homes (FAH), a social impact company which builds and acquires affordable housing, has raised GBP20 million at its first close since Edmond de Rothschild REIM was appointed as Property and Investment Adviser. 

The Edmond de Rothschild Residential Investment Fund UK, which was launched in August 2018, has now raised GBP266 million of equity, giving it total firepower, including debt, of around GBP450 million, exceeding its original target of GBP400 million.  

It is creating a diversified portfolio of purpose-built PRS assets, delivering sustainable, stable and growing distributions over the long term. Using a unique and comprehensive research-led approach, Edmond de Rothschild REIM focuses on the lower-to-mid market and has identified regional cities and locations across the UK where demand for rented accommodation is strong and set to grow and where existing stock is predominantly old, poor quality and in houses of multiple occupation.  

The fund’s first six assets are forward funding agreements in Leicester (two sites), Birmingham (two sites), Warrington and Nottingham, which, in total, will deliver around 1,400 apartments. Edmond de Rothschild REIM operates a vertically integrated platform and provides a lettings and management service for the completed developments from its in-house PRS team.

FAH’s new equity will enable it to continue delivering new affordable housing within the regulated housing sector, while providing investors with long and secure indexed-linked income streams. It has already acquired, or committed to acquire, around GBP170 million of socially beneficial housing projects in London, the east and south of England and other parts of the country. It typically provides forward funding to enable new properties to be built and managed by established local Registered Housing Providers, while also utilising its own subsidiary housing association, Funding Affordable Homes Housing Association, to provide access to grant funding and amplify the fund’s social impact

FAH’s current investors include Big Society Capital, which improves the lives of people in the UK by connecting social investment to social enterprises and charities to create a greater social impact, and the Joseph Rowntree Foundation, an independent Foundation, working to inspire social change through research, policy and practice.

Both the Edmond de Rothschild Residential Investment Fund UK and FAH deliver further positive impact by regenerating or repurposing brownfield urban sites with the provision of new build housing. All are built in compliance with the latest UK sustainable building regulations and standards.

James Whidborne, head of residential fund management UK at Edmond de Rothschild REIM, says: “We are delighted with the support shown by investors towards our social impact residential investment strategy, both for private sector build-to-rent and regulated affordable housing. We aim to grow our UK residential platform to in excess of GBP1 billion over the next 24 months. 

“We believe the current environment provides an excellent opportunity to create a diversified portfolio of UK rental assets delivering the panacea of sustainable investor returns and genuine social impact. This is at the heart of Edmond de Rothschild’s core convictions”.