The global housing deficit in both developed and developing countries is increasing – driven by demographic and other mega-trends including urbanization and income inequality. Global pension fund assets, on the other hand, are both growing and increasingly looking for long-term, productive investments.
There are multiple avenues through which pension funds can invest in the housing sector. ‘Supply side’ investment opportunities range from direct investments in housing projects or investments in housing developers to investments in housing funds or social housing bonds.
‘Demand side’ investment opportunities include a range of investments in mortgage securities – whether covered bonds, mortgage-backed securities, or via bonds issued by mortgage-liquidity facilities.