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Schroders To Launch Impact Investment Fund To Boost Deprived UK Towns

CMS' Victoria Henry and Schroders' Sophie van Oosterom

One of the UK’s oldest fund managers plans to launch a UK impact investment fund for the first time, Bisnow can reveal, as it looks to expand its business beyond traditional real estate and invest in some of the country's poorest areas.

Speaking at Bisnow’s Women Leading Real Estate event last week, Schroders Global Head of Real Estate Sophie van Oosterom told a live audience of more than 250 people that the new fund would be launched in the fourth quarter.

In a sign of how traditional fund managers are expanding their horizons, just a few years ago Schroders only invested in traditional commercial real estate assets. The new impact investment fund comes on the heels of a social housing fund it launched last year.

Schroders is working with impact investment specialist BlueOrchard to design the strategy, van Oosterom said. It has devised a framework allowing it to measure the social impact the fund’s investments create, as well as the financial return, to avoid any accusation of "greenwashing" or "social washing" — putting a social impact label on a fund when it doesn’t actually create any benefit.

Schroders’ in-house data scientists have worked with BlueOrchard and looked at the GDP and income levels of towns across Britain. The fund will look to invest where it can have the most benefit, van Oosterom said, putting the vehicle in line with the government’s "levelling-up" agenda. The fund can invest in any type of real estate asset as long as it provides some additional positive social impact. 

“I think everyone now has their pathway to net zero on the environmental side, so the more interesting thing now is on the social side,” van Oosterom said in a keynote interview with CMS co-Head of Corporate Victoria Henry. 

“Investors are asking us, how are you engaging, how are you measuring to make sure this is not greenwashing or social washing?

“We’ve looked at the income and GDP levels around the UK in very granular detail, we’ve measured the access to education, the access to sports facilities — all of those data points are put onto a map so we can see which areas would benefit most from a pound of investment and would see the most improvement. There are a lot of different ways to measure that improvement, whether it is improved access to green space, education or care facilities.”