Henley Investment Management’s SIPUT II fund has successfully raised £85m since its inception in 2022, continuing to address the growing need for high-quality supported housing across the UK.
SIPUT II, which local government pension funds back, builds on the foundation of its predecessor while incorporating key structural enhancements to serve the sector and its stakeholders better.
Vicky Amlot, Fund Manager at Henley Investment Management, explains the unique structure of SIPUT II:
”We manage the real estate, so effectively we have a property leased to a registered provider tenant, and the provider provides housing and tenancy management to individuals who have funded care and support packages, generally providing 24/7 support.
This approach ensures that Henley remains closely involved in the ongoing management of schemes while allowing specialist providers to focus on delivering high-quality care and tenancy services.
A New Approach to Long-Term Investment
SIPUT I, launched in 2017 and deployed approximately £440m into the market, has now closed to new investment and is expected to remain in place until 2042. In contrast, SIPUT II operates as an evergreen fund, allowing for continuous investment rather than being restricted to a set investment window.
Amlot highlights another key difference:
”Flexibility on lease terms has allowed us to bring in some of the larger G1, V1 RPs that operate within the sector.
In response to regulatory concerns about financial viability, SIPUT II incorporates capped rent increases and change event clauses, ensuring stability for registered providers and mitigating risks associated with housing benefit fluctuations.
Addressing the National Shortfall in Supported Housing
There is a well-documented shortfall in supported housing across the UK, contributing to delayed hospital discharges and the placement of vulnerable individuals in unsuitable settings.
Amlot underscores the urgency of this issue:
”The cumulative time for delayed discharge, so people who are in mental health hospitals that are ready to move on, was something like 300 years for 2023/24. I mean, I think the average length of stay for someone with learning disabilities or autism who has been in a secure unit is something like five years. It’s not the kind of environment that is suitable for people that have those types of conditions.
Henley’s commitment to providing high-quality, sustainable housing is reflected in its emphasis on energy efficiency. All properties within the fund meet a minimum EPC rating of C, with a significant portion achieving ratings of A and B. This aligns with Henley’s broader ESG strategy, ensuring long-term value for investors while delivering tangible social impact.
A Structured and Secure Approach
Unlike speculative developments, SIPUT II requires a registered provider to be in place from day one, with indicative housing benefit approval secured upfront. Many local authorities partnering with Henley have also provided void agreements, covering rent in cases where a tenant has not yet been placed. However, given the pressing need for supported housing, occupancy rates remain high at 94%.
Henley’s innovative approach to supported housing investment demonstrates the potential to deliver strong financial returns and positive social impact. By leveraging strategic partnerships, ensuring financial stability for registered providers, and maintaining high occupancy rates, SIPUT II is well-positioned to support the evolving needs of vulnerable individuals and local authorities.
19th March 2025
Read the original full article at HealthInvestor.