Legal & General and Dutch Pension Fund PGGM Partnership Set To Pioneer ESG Advances

28/01/2015

Legal & General and Dutch pension fund manager, PGGM, have launched a London Office joint venture partnership and have already successfully completed their first £67 million investment – 72 Broadwick Street in Soho. The joint venture initially has an allocation of circa £375 million to invest.

The joint venture has been set up to source attractive Central London office investments which provide superior growth prospects due to neighbouring infrastructure and regeneration projects, as well as significant asset management opportunities. With a focus on impact investment, the Partnership will look to integrate material environmental, social and governance (ESG) aspects throughout its assets, in turn realising a strong ESG performance.

Legal & General Property will lead the acquisitions process and act as the fund manager for the joint venture. The joint venture will focus on office properties where LGP can use its specialist asset management skills to realise value through repositioning and redevelopment. The joint venture will be looking for assets ranging between £30m - £90m which require significant improvement and where they can be part of a wider regeneration story.

Laura Mason, Director of Direct Investments at Legal & General Capital, said: “The UK is a great place to invest, pension funds and sovereign wealth funds want to invest here in infrastructure, direct investments and property. Joint ventures are an excellent way of achieving this, as they offer co-investment with a trusted partner with specialist local expertise and knowledge. Today’s announcement is an excellent example of what can be achieved by partnering with forward-thinking international capital, and I would expect many more joint ventures of this type to follow.”

Mathieu Elshout, Senior Investment Manager at PGGM commented:  “Representing our second strategic partnership with Legal & General, the London Office joint venture yet again allows us to take advantage of the opportunities that exist in the UK for those with the right approach to investment and skills to proactively enhance its portfolio. This partnership is another example of our ambition to have a high degree of control over our investments. As a responsible investor we believe that we have an obligation to contribute to a sustainable world. We can do so via impact investment, or investing in solutions, as we call it. We strongly believe that ESG factors have a material impact on the financial performance of our real estate portfolios and that this will continue to grow over time. Sustainability is an issue that transcends national boundaries and requires an international approach. Looking to seek out assets where improvements could be made, we believe that together with L&G we are strongly placed to realise the value that is available for those that lead the way in pioneering ESG advances.”

Read more about the joint venture here.

About PGGM

PGGM is a cooperative Dutch pension fund service provider. Institutional clients are offered: asset management, pnsion fund management, policy advice and management support. On December 1, 2014 PGGM has EUR 179,5 billion in assets under management. The PGGM cooperative has approximately 678,000 members and is helping them to realize a valuable future. Either alone or together with strategic partners, PGGM develops innovative future provisions by linking together pension, care, housing and work. www.pggm.nl