According to a new study commissioned by investment manager Downing, 54% of UK pension schemes interviewed believe that investing in social care can help professional investors meet important ESG investment objectives.

The pension funds interviewed, who collectively manage over £102 billion in assets, believe that the social care sector is under pressure from the weight of growing demand, funding shortfalls and a lack of modern, fit-for-purpose accommodation. But the respondents also believed that this creates an opportunity for institutional funding to alleviate some of the pressures and consequently improve their ESG (environmental, social and governance) credentials.

The social care sector could also benefit from the fact that when it comes to ESG investing institutional investors have, to date, primarily focused on the ‘E’ but they are now placing a much bigger focus on the ‘S’.

Mark Gross, Head of Development Capital, Downing said: “The ageing demographic in the UK has pushed the social care sector into the spotlight and has substantially increased demand for modern, fit-for-purpose accommodation. This represents an exciting opportunity for institutional investors to help fund some of the improvement needed in the UK’s social care system, enhancing their ESG credentials, while also receiving a return on their investment. This is a view that all the pension schemes we interviewed said they agree with.”

Downing is a market leading healthcare investor. Its award-winning Development Capital team partners with exceptional management teams to help realise their growth ambitions. Healthcare is a specialist subsector the team focuses on, and it looks to link with high-quality businesses within the elderly care, specialist adult care and special educational needs space. Downing’s extensive network and specialist expertise within the sector gives investors access to a wide range of investment opportunities within the healthcare market.

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