The majority (84 per cent) of UK pension schemes expect institutional investors to increase their exposure to social care in future, while over a third (34 per cent) expect their appetite for investing in social care to increase ‘dramatically’, research from Downing has revealed.

The survey also found that 88 per cent of UK pension schemes thought that the firm commitment from some local authorities and local governments to social care provision means investing in social care assets can offer strong defensive features for investors.

In addition to this, it found that 90 per cent of UK pension schemes believe the government reforms will have a consequential positive impact on the appetite of professional investors for investing in social care.

The study also suggested that the current economic headwinds could drive more investment into the social care sector from institutional investors.

In particular, dementia care was expected to see the greatest increase in institutional investment, with 48 per cent of UK pension schemes expecting institutional investors to "dramatically" increase their investment in this space over the next five years.

Commenting on the findings, Downing investment director, Torsten Mack, stated: “Our study shows that over the next five years, the areas of social care with the largest expected increase of institutional investment are dementia care, care homes for adults with complex needs and care homes for adults with physical, mental and learning difficulties.

“In addition to the unmet demand in the market, a further key reason driving the increase of investment is the level and ‘stickiness’ of state and local government funding.”

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