Real assets investment manager AlphaReal has deployed £350 million of long income real estate backed investments over nine months on behalf of Just Group, a FTSE-listed specialist UK financial services company, with a significant social infrastructure focus.
The portfolio includes over 100 healthcare facilities that provide specialist care for patients with high acuity caring needs and childcare centres providing important support for families, collectively capable of providing care services for approximately 1,800 individuals.
The investments have been originated and structured by AlphaReal to meet Just Group’s requirements, diversified across asset type and sectors throughout the UK; and offering long-dated, inflation-linked cashflows secured against real estate assets and social infrastructure.
Gordon Smith, Fund Manager at AlphaReal said: “We are delighted to be working with Just Group in originating and managing investments that offer secure, long-dated, inflation-linked cashflows. AlphaReal’s innovative ground rent structures are particularly appealing to investors who recognise that these high-quality cash flows deliver a favourable risk adjusted return and portfolio diversification benefits.”
Boris Mikhailov, Head of Client Solutions at AlphaReal said: “It is great to be working in partnership with Just Group, the UK’s leading retirement specialist. We see increasing interest from insurers in secure income strategies with the trend expected to continue into 2024 and beyond. This is driven by a significant uptick in the volume of defined benefit de-risking activity, with 2023 expected to be another record-breaking year. Insurers, like Just Group, are seeking opportunities that can provide secure cashflows and that’s where strategies like commercial ground rents can be attractive. The introduction of Solvency UK should further increase the appeal of secure income assets to insurers.
Nenna Gilmour-Platt, Head of Investment Strategy at Just Group commented: “These investments provide attractive long-dated cashflows with inflation protection helping us to meet the financial promises we have made to our customers. Our customers have trusted us to look after more than £26 billion of their retirement savings and we want the money we invest on their behalf to have a positive impact on society and the environment. Investing in healthcare facilities and social infrastructure allows us to fulfil our purpose to help people achieve a better later life.”
Click here to receive CRE Herald’s weekly newsletter, news alerts and insights!