UK institutional investment manager Legal & General has raised a fresh slug of equity for its UK affordable housing fund, taking the total raised to £510M.

L&G has pulled in £130M of new commitments at a second close of the fund, including £100M from London CIV, the investment pool for the Local Government Pension Scheme, to invest in affordable housing nationally.

In addition, ACCESS Pool, an LGPS collaboration of Central, Eastern and Southern Shires, has invested a further £20M on top of a previous allocation in 2024.

The funds raised so far are expected to deliver about 3,500 to 4,000 homes.

L&G also said it has seeded the fund with a portfolio of 514 homes and exchanged contracts on three funding opportunities to bring forward more affordable housing development.

Given the current pipeline, the fund expects to have more than 1,000 homes either operational or under construction by the second quarter.

L&G said the money raised shows that institutional investors want inflation-linked returns alongside positive social impact.

The fund’s assets are developed and operated by Legal & General Affordable Homes, the investor’s in-house affordable housing division. It has invested more than £1B in affordable housing, with more than 8,000 homes in operation or development since the business was established in 2018.

“The level of interest we have seen in this fund since its inception last year is a testament to the attractive proposition that investors see in contributing to much-needed affordable housing in the UK, while seeking steady inflation-linked returns and positive social impact,” L&G Fund Manager Ali Farrell said in a statement.