This post first appeared at The Irish Times.

A fund dedicated to the provision of social housing has refinanced its portfolio with AIB to secure funding of €30 million that will help it acquire about 100 homes.

The Irish Social Housing Fund (ISHF), established in 2018 by debt advisory group New Beginning and investment firm RoundShield, completed the financing to allow it to deploy the funding on social housing developments across the Republic. ISHF noted the deal was done with a “pillar bank” which The Irish Times understands to be AIB.

To date, the ISHF has invested more than €100 million in equity to purchase 400 homes and apartments, working with local authorities to redevelop and refurbish properties to high standards, while providing those properties at discounted rents on a long-term basis for social housing. The fund has set a target of delivering 1,500 properties for social housing over the coming three years.

New Beginning chief executive – and barrister – Ross Maguire told The Irish Times that the fund would refinance for another €30 million “in a few months time”.

“Once the portfolio is stabilised, it could be suitable for pension funds to invest in,” he noted.

The fund comprises properties that are leased to local authorities on a 25-year term, making them an attractive proposition for investors seeking a stable return.

Second fund

Meanwhile, the company has launched a second fund that it expects will be bigger than the first one. It will invest in new builds and provide financing to developers and landowners to help them produce residential properties that will be bought by the fund and leased for the purpose of social housing. The fund will invest in developments all over the country.

“Long-term leasing is a key part of the State’s response to the acute need for social housing,” Mr Maguire said.

“There are real benefits to long-term leasing, not least the fast delivery of permanent homes at discounted rent. In addition, many of the homes we provide are properties that were previously out of use and required substantial investment.

“Through ISHF’s investment in redeveloping housing, the State has already been able to provide homes to hundreds of families on social housing waiting lists. As ISHF ramps up this strategy and accelerates its expansion into new-build social housing development, many more homes will be provided in the coming years.”

New Beginning was founded in 2010 and has expanded to include in its work a range of commercial funding products. Mr Maguire described the venture as one with a “commercial head and a social heart”.

“There’s a lot of properties out there that are very unloved and we have the financial capability to turn those around,” he said.

RoundShield Partners has raised more than €1.4 billion for a variety of investment platforms, but its focus is European asset-backed “special opportunities”. It was established in 2013 by three former executives from capital market company ESO Capital.