Octopus Healthcare has raised £187m for its evergreen UK care home fund on the back of growing demand from institutional investors.
The investor said that pension funds, insurance funds and multi-managers are looking to increase their allocation to healthcare real estate.
The fund, launched in 2010, invests in purpose-built care homes for the elderly. It converted to an open-ended structure in 2017.
Ben Penaliggon, director at Octopus Healthcare, said: “With the population of the over 85s expected to grow by 64% to 2.6 million by 2031, the UK is facing a severe shortage of suitable housing for the elderly.
“There is demand for modern, high-quality care homes in the UK, yet supply is limited. There is a huge opportunity for institutional investors to invest in this growing market and provide the capital needed to create suitable accommodation for the ageing population, while benefiting from the long term, inflation-linked income that the sector offers.”
Hiti Singh, head of institutional investment at Octopus, added: “Institutional investors are increasingly looking for alternative asset classes to expand or diversify their portfolios.
“Healthcare real estate offers a compelling combination of attractive fundamentals driven by an ageing population and long-term income, together with the social benefit of providing first class and modern accommodation for elderly people needing care.”
Octopus has secured more than £230m of transactions into the UK elderly care home sector over the past 12 months through a combination of standing investments, forward fundings and forward commitment acquisitions.
In addition to UK care homes, the fund also has the ability to invest in specialist healthcare facilities.
Octopus Group currently manages more than £2.3bn of institutional funds.
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