Two U.K. local authority pension funds committed £95 million ($131 million) to a new fund launched by M&G Investments.
Cambridgeshire County Council Pension Fund, Cambridgeshire, committed £50 million to the M&G Shared Ownership Fund, while Northamptonshire County Council Pension Fund committed £45 million, spokesmen confirmed.
In partnership with housing association the Hyde Group, M&G's strategy will fund £500 million of new sustainably designed affordable homes, a news release said.
The fund launcher with a total £215 million in commitments, including the LGPS funds' investments.
"For income seeking investors such as pension funds, shared ownership offers another means of diversification due to the sector's low correlation with other asset classes and long-term inflation-linked income with exposure to house price growth,"
Paul Tysoe, investment manager for both the Northamptonshire and Cambridgeshire funds, said in the release: "Having invested in M&G's U.K. Residential Property Fund since 2017, we have the comfort of its track record, expertise and ESG credentials and we welcome the positive social impact that this new fund represents."
The strategy is run by M&G Real Estate, which has £33.4 billion in assets under management.
Cambridgeshire had £3.6 billion and Northamptonshire had £3 billion in assets as of Dec. 31.