ISIF €500m tie-up set to bridge home shortage gap
The lending platform, to be known as Activate Capital, will be capable of funding the construction of over 11,000 new homes.
Of the €500m, ISIF, which is managed by the National Treasury Management Agency, is putting up €325m in its biggest investment to date, with US-headquartered KKR chipping in €175m.
“There is a significant mismatch between the demand for quality new homes in Ireland and the supply that is currently available,” said ISIF head of private equity, Fergal McAleavey.
“Our joint venture will help to address this by providing funding on a commercial basis to development projects that are capable of delivering over 11,000 new homes.
This will meet the ISIF’s ‘double bottom line’ criteria of achieving commercial returns while delivering a significant economic impact — in this case by providing crucial infrastructure that Ireland needs urgently.”
Activate Capital will focus exclusively on lending to Irish residential development projects on a commercial basis to projects, providing home-building companies with cost effective loans for up to 90% of the total financing requirement.
The ISIF, which replaced what was left of the National Pensions Reserve Fund and is tasked with supporting economic activity and creating jobs, has been criticised for the slow pace of investments to date.
