CPP Investments Launches Joint Venture to Bolster UK Housing Market

The Canada Pension Plan Investment Board announced it has formed a joint venture with real estate investment company Kennedy Wilson Inc. to build new single-family rental housing in the U.K.

According to the C$646.8 billion ($465.8 million) pension fund, it will initially commit 500 million pounds ($647.4 million), while Kennedy Wilson is committing 56 million pounds. The CPPIB will own a 90% stake in the joint venture, with Kennedy Wilson owning the remaining 10%.

There is currently a “severe housing shortage” in the U.K., according to think tank the Institute of Economic Affairs, which said Britain has a much lower level of housing supply than comparable countries. “Catching up with the EU average in terms of the number of housing units per 100,000 inhabitants would require the construction of 3.4 million additional homes in England alone,” according to an IEA report.

The CPPIB and Kennedy Wilson announced that the joint venture will target energy-efficient new-build housing stock in what it deems strong and growing local economies and which will be constructed through partnerships with British homebuilders. They also stated the investment program is being seeded with properties from two of Kennedy Wilson’s developments, including units under construction by residential property developer Barratt Redrow in Norwich, England.

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According to Kennedy Wilson, it is now leasing the first phase of completed homes, as well as homes by British builder Miller Homes in Stevenage, England, which it expects will be completed starting in the second quarter of 2025. Kennedy Wilson has an active pipeline of 1,100 units, with the capacity to boost that to 4,000 units at full capital deployment.

“Private capital can play an important role in addressing the current undersupply of high-quality rental housing in the U.K., particularly where it is professionally managed to provide a great customer experience,” Tom Jackson, the CPPIB’s head of real estate, said in a statement. “Investing into the U.K. single-family housing sector aligns well with our broader real estate strategy, to undertake scalable investments into high quality assets with growing cash flows.”

Kennedy Wilson will manage the joint venture and earn customary fees.

“Residential has long been a crucial part of Kennedy Wilson’s investment strategy, and our JV with CPP Investments, a leading global institutional investor, will propel our efforts to deliver much-needed rental homes for local families,” said Mike Pegler, president of Kennedy Wilson Europe, in a statement. “The structural challenges facing institutionally managed rental housing in the U.K. provides a clear investment rationale to enter the market.”

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Tags: Barratt Redrow, Canada Pension Plan Investment Board, CPPIB, Kennedy Wilson, Mike Pegler, rental housing, Tom Jackson, UK real estate

In a public letter to the Florida State Board of Administration, the entity which manages $245 billion in pension assets, Jimmy Patronis, Florida’s chief financial officer, called on the board to add cryptocurrencies to the state’s pension holdings.

Patronis, appointed CFO in 2017 as a replacement and then elected in both 2018 and 2022, requested the SBA develop a report on the risks, feasibility and potential benefits of adding cryptocurrencies to the SBA holdings.

“The State Board of Administration maintains a Florida Growth Fund that allows for more innovative and emerging investments, and a Digital Currency Investment Pilot Program could be a perfect fit, offering potential benefits we cannot afford to overlook,” Patronis’s letter stated.

Some pension funds, including the State of Wisconsin Investment Board, have exposure to cryptocurrency through exchange-traded funds. The SWIB purchased more than $160 million in two Bitcoin ETFs earlier this year. The Michigan Retirement System also purchased $6.6 million in Bitcoin ETFs this year.

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“When managing state pensions for firefighters, teachers, and police officers, it’s also essential to prioritize the bottom line and ensure the best return on investment for Floridians,” Patronis wrote in the letter. “This is where the potential of investing in a cryptocurrency, like Bitcoin, becomes particularly compelling. There’s no telling what the future of cryptocurrency will be, but it’s important that the State of Florida stays ahead of the curve when considering new investments and providing the best returns for Floridians.”

The SBA had no immediate response to a request for comment.