Legal & General and NatWest Pension Trustee (NWPTL) have formed a 15-year joint venture partnership to invest £500 million of equity to build later-living communities to be developed and operated by Inspired Villages.

As part of the joint venture, Legal & General has sold a 50% stake in Inspired Villages’ first 11 sites to NWPTL based on an enterprise value of more than £300 million, allowing it to reinvest equity back and support its future pipeline.  

Inspired Villages currently has six villages housing 919 residents and four sites under construction. With a commitment to back a portfolio of 34 sites – equating to around 5,100 homes, 8,000 residents and an estimated gross development value of around £4 billion – it enables Inspired Villages to scale its impact in addressing the shortage of housing for older people.

NWPTL is the trustee the NatWest Group Pension Fund, the bank’s defined benefit pension scheme, which has more than 200,000 members and £53 billion of assets. It has also committed to acquiring all the developed fully occupied villages outright, placing them into an operational fund. The developed villages will continue to be managed by Inspired Villages to provide resident services. This has the potential over time to create an investment platform that allows other pension funds to access and invest in the sector via mature assets, allowing UK pension money to be deployed at scale in order to match long-term liabilities for later-living in the UK. 

Robert Waugh, chief executive of NWPTL, said: “The investment potential of the later-living sector is substantial as the need to support our ageing population increases. This new partnership with Legal & General and Inspired Villages aligns perfectly with our ambitions to invest in areas that present strong social and environment credentials, whilst offering a good match for our long-dated liabilities. As Inspired Villages continues to mature and grow its portfolio, we are excited to be coming on board to support its expansion.”

Laura Mason, chief executive of Legal & General Capital, added: “At Legal & General, we are determined to use society’s capital for society’s benefit. Net zero later-living communities, which help to tackle climate change whilst addressing years of underinvestment in our ageing population, do just this. This transaction is unique as it sees one of the largest UK pension funds investing directly into UK private social infrastructure. Broadening the range of growth assets that pension money can access is an important step forward for the UK’s growth agenda and economic future, allowing our country’s savings to support the UK in building back better, address climate change and tackle the major issues society is facing.  We hope to see further deals like this follow.”

Jamie Bunce, chief executive of Inspired Villages, added: “NatWest Group Pension Fund’s desire to co-invest is a fantastic testament to our company’s vision and hard work. The deal will allow us to grow at pace so we can help thousands more over 65s enjoy healthy, independent living for longer and support our country’s overburdened health and social care system. NatWest Group Pension Fund is closely aligned with our sustainability goals, so partnering with them will allow us to continue to lead the sector, delivering net zero carbon later living communities which will make a real difference to the way we live and age in future.”

Date published: August 3, 2021

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