Cheyne Capital

Who is Cheyne Capital?

Cheyne Capital is one of Europe’s leading alternative investment fund managers and was established in 2000. The firm has a total staff of 138 and approximately $5 billion of net assets under management. The firm’s main areas of expertise are real estate debt, social property impact, corporate credit, and equity / equity linked investing. Cheyne is regulated in the UK by the Financial Conduct Authority.

Why are they getting involved in social housing?

Cheyne manages capital on behalf of some of the world’s largest insurance, pension and sovereign wealth funds. Increasingly, investors are looking to invest their money to create a balanced social and financial return. The Cheyne Social Property Impact Fund was launched in November 2014 in response to investor demand and in order to help tackle the chronic shortage of housing solutions for disadvantaged groups in the UK.

What is the Social Property Impact Fund?

The Fund is a socially responsible fund which works with high impact, non-profit, social sector organisations, including local councils, housing associations and charitable organisations that are delivering housing and supported services in the UK. The Fund focuses on a wide range of areas including social/key worker housing, elderly extra care, adult social care and supported living for people with physical and/or learning disabilities. The Fund launched with support from a range of investors including Big Society Capital, who worked closely with Cheyne Capital to anchor the Fund with a seeding commitment. The Fund:

  • Focuses on social issues caused by housing shortages
  • Areas of interest include: social housing, supported housing, regeneration,
  • Seeks to provide sustainable communities through mixed tenure developments, driven by community needs
  • Has a co-operation agreement with National Housing Federation
  • Has a partnership with Kier Living and the HCA-backed, Housing Growth Partnership
  • Innovative, CPI linked, lease model over the rented units
  • Provides an ability for income generation, funding and risk diversification for housing associations

How the Fund works

  • The Fund will take all the financing, development and construction risk to provide a complete turnkey development solution
  • Properties are not subject to Voluntary Right to Buy or rent regulations
  • The housing association partner has the ability to manage the tenure mix and set rents to offer flexibility in risk management and react to the local demand whilst generating an income surplus
  • Can benefit housing associations that have little or no development expertise or limited cash resources
  • Complimentary to housing associations with existing development programmes
  • Frees up valuable capital and personnel resources
  • Management and maintenance allowance agreed with housing association
  • Leases can be 21 years (with automatic right to roll) or a 40 year lease with ownership transfer to the housing association

Who is it suitable for?

The Fund has a flexible model and will be best suited to housing associations that are looking to continue adding to their housing stock by developing land or acquiring properties, but currently lack financial resources and/or internal expertise.

  • The Fund is designed to be used for developments with a minimum of 75 units or a minimum investment of around £10 million.
  • The properties can be utilised for a variety of uses depending on the requirements of the housing association – general needs, supported living, elderly care and for a range of tenures – social, affordable, rent to buy and market rent.

Contact

Darren Carter
Cheyne Social Property
Email darren.carter@cheynecapital.com
Tel. 0207 968 7314 or 07974 739 541