Now Pensions has made its first investment in private markets with an allocation to UK affordable housing, with the new allocation expected to support its commitment as a signatory to the Mansion House Accord.

The focus of the latest investment is to increase the supply of affordable housing in the UK, allowing Now Pensions to gain exposure to residential properties designated as affordable and deliver long-term, stable, inflation-linked returns.

Specifically, it will support the development of three types of affordable housing: regulated rentals, for people on the social housing waiting list and receiving a housing benefit; local affordable rentals, designed for people priced out of the local rental market; and Shared Ownership models.

The investment also builds on Now Pensions' commitment to the Mansion House Accord, which saw the group agree to invest at least 10 per cent of the default fund in private market assets, including at least 5 per cent in the UK by 2030.

This is expected to improve member retirement outcomes by generating better returns and is also aligned with Now Pensions’ ambition to make responsible, socially impactful investments.

The group also confirmed that its trustee is currently researching other suitable investments that would benefit its members as part of its private markets strategy.

Commenting on the news, Now Pensions board of trustees chair, Joanne Segars, said: “This is our first investment into private markets. Investing in affordable housing presents an opportunity to generate strong financial returns for our members while contributing to a vital social need.

"The Now Pensions trustee will continue to explore opportunities to expand its exposure to private markets, with a particular focus on sectors that offer strong growth potential and align with the long-term needs of our members.”

Adding to this, Now Pensions director of investment, Martyn James, said: “This investment is expected to provide complementary return drivers compared to more traditional parts of the growth portfolio, providing good diversification.

"Our investment strategy remains focused on delivering long-term value, and we are confident that our diversified approach, which includes an ambition of at least a 10 per cent allocation to private markets by 2030, will continue to benefit our members’ retirement savings.”

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