Irish Life ready to back housing projects with pension funds
Chief executive of €30bn fund interested in new home developments amid low yields, writes Gavin McLoughlin
Ireland's biggest pension provider is willing to put some of the €30bn in pension funds it has under management into new social housing projects in this country.
Irish Life chief executive David Harney said the group would be interested in both public and private projects if the right investment structure were in place.
"Pension funds have built up a lot of money. And in Ireland there's €100bn been built up in pension funds so people are looking for areas to invest in... it's about figuring out how to make it attractive," Harney said.
"There's a lot of difficulty, say if you just stick within Dublin, I suppose where would the housing projects take place and what format would they be? That's the biggest problem. I suppose the secondary aspect then is just the nature by which financial support could be given.
"But that's something that could be worked through. Is it just a form of lending and finance, or what would the arrangements be?"
"We'd be interested in exploring it, [but] it depends on the detail," Harney said, adding that he believed other Irish and international pension funds would also be interested.
The Government has signalled its intention to approach pension funds in its "action plan" for housing and homelessness.
"We haven't made any approaches [to the Government] specifically from Irish Life, there have been sort of side conversations, and people are aware there's lots of money in pension funds and pension funds are keen to look for opportunities to invest," Harney said. "I suppose it's the Government's responsibility, there's planning that's needed to do it.
"There's lots that can be done on private housing around planning as well, that just opens up the market a little bit and makes it easier to do business.
"The money is there to invest, it's not a shortage of capital that's causing the problem."
Property developer Bill Nowlan has previously outlined a plan to approach pension funds to invest in a social housing scheme.
"From my research into funding the social housing sector there is considerable interest from investors such as pension funds in a long-term asset like housing.
"Low yields in bond markets mean investors are looking into other asset classes, and investment in housing in Ireland is on their radar screen," Nowlan told the Sunday Independent.
Sunday Indo Business