Octopus Capital Announces £60m Investment into Octopus Healthcare Strategy

Octopus Capital, an asset manager investing in the people, ideas, and industries that will change the world, today announces it has raised just under £60m from LGPS Central (LGPSC) and Knight Frank Investment Management. This investment will enable our investment managers to harness the power of private capital to enable meaningful progress in the UK care home sector.

For the past 15 years, Octopus Capital has been directing institutional funding into the development of care homes, delivering high-quality, sustainable homes that are fit for the future. This new investment will enable the Octopus Healthcare Team to continue with this mission. Their new total funds under management is now £1.7bn, and they have more than 100 modern, purpose-built homes in the portfolio, providing over 7,500 care beds.

£58m of the investment has come from LGPSC, the investment manager of the Local Government Pension Scheme (LGPS) funds of Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands and Worcestershire. By pooling resources, LGPSC are able to enhance investment outcomes and expand access to a broader range of asset classes. This is exactly the case with this new investment; their first into the care home asset class.

The rest of the funding has come from Knight Frank Investment Management, the specialist property investment arm of one of the world’s leading independent real estate consultancies. This adds to their existing investment in the Octopus Healthcare Team’s strategy, on behalf of their clients.

Octopus Capital’s approach to the care sector is based on three key pillars: financial analysis, quality assurance and responsible investment. On the latter, the Octopus Healthcare Team has recently received a 5-star rating in the Global Real Estate Sustainability Benchmark (GRESB), the preeminent sustainability benchmark for the real estate investment industry, for the third consecutive year.

The strategy scored 91 out of 100, outperforming the GRESB average score of 79 in the ‘Standing Investment’ submission. The team also scored 97 out of 100 for the ‘Development’ submission, outperforming the peer group average of 87. In both categories, they ranked within the top five of its broader peer group.

Michael Toft, Head of Care Homes at Octopus Capital:

“The UK continues to face an undersupply of quality care homes whilst demand continues to grow with our ageing population. By leveraging our expertise and importantly, with this new injection of capital, we can create more care homes to help meet this urgent need. We have a Quality Assurance Team to ensure high standards of care, and long-standing relationships with best-in-class operators, that will allow us to provide the essential infrastructure required to support our elderly across the UK today, and in the decades to come.”

Sian Roberts, Head of UK Institutional Sales:

“We’re really pleased to see more LGPS pool capital come into the strategy, as they begin to execute on their ‘fit for the future’ proposals. We know that these pools are increasingly looking to invest in local growth and social infrastructure, so we look forward to facilitating that through both our existing suite of products, and through creating tailor-made private market solutions.”