Real estate lender and investor Octopus Real Estate has raised a further £314 million for its UK care homes fund, bringing the fund’s total value to more than £1 billion.

The recent fundraise, spanning the March and June 2021 quarterly subscription windows, saw commitments from a range of new and existing institutional investors from the UK, Europe and Japan. The fund also attracted interest from local government pension schemes in the UK, with investments from Greater Manchester Pension Fund and schemes investing via the Brunel Pension Partnership pool. The proceeds will be invested in a pipeline of UK care home assets.

Octopus Real Estate currently manages a portfolio of 77 modern, purpose-built homes, including 13 properties under construction.

This fundraise is the first to be completed since Octopus’s care homes fund recently transitioned to operate as an impact fund in line with the International Finance Corporation’s Impact Principles. This places a commitment to create a positive social impact by tackling the chronic undersupply of quality care home beds in the UK.

CBRE Capital Advisors acted as placement agent together with Octopus Group’s in-house institutional sales team.

Michael Toft, co-head of care homes at Octopus Real Estate, said: “The UK continues to face a severe undersupply of quality care homes. Institutional capital has an opportunity to play a significant role in answering that need, while benefitting from the stable returns the sector offers. We’re pleased that institutions and pension funds continue to recognise the strong performance of the sector at such a crucial time, and are engaging with our commitment to deliver real impact that drives positive change in the care sector.”

Benjamin Davis, chief executive of Octopus Real Estate, added: “This latest fundraise is testament to the growing institutional appetite from across the world for assets in the UK care home sector. Exceeding the £1 billion mark signifies a vote of confidence in the sector, and the expertise that Mike and the wider care home team bring to the table. This is a scalable strategy with huge growth potential, and we look forward to deploying this capital and continuing to provide new, best in class care homes across the UK.”

Date published: July 28, 2021

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