A leading London Assembly Member has issued a direct challenge to the capital's primary pension investment body, urging it to deploy more of its vast £51 billion in assets to tackle the city's severe shortage of affordable homes.
The Call for Greater Investment in 'Real Assets'
James Small-Edwards, who chairs the Planning and Regeneration Committee at City Hall, argues that the London Collective Investment Vehicle (London CIV) could unlock thousands of new homes by significantly increasing the proportion of capital it invests in housing and infrastructure. LCIV is the pension investment pool for all 32 London boroughs and the City of London.
Currently, LCIV states it has allocated approximately £530 million for affordable housing, equating to just over one per cent of its total assets. Mr Small-Edwards contrasts this with pension models in Canada and Australia, where the largest funds invest more than a fifth of their holdings in 'real assets' like housing, transport, and infrastructure.
"Something like three per cent of LCIV's capital is currently deployed in 'real assets' - things like infrastructure - this is very, very low compared to other public sector pension funds," he said in a recent interview.
A 'Slam Dunk' Opportunity for Long-Term Returns
The Labour Assembly Member for West Central suggested that new government rules, which will compel LCIV to transfer around £17 billion of legacy assets into its main pool, present a perfect moment for strategic reform. He estimates that investing even 10% of its £50+ billion in London's infrastructure could generate billions of pounds for housing without extra taxpayer money.
"You're talking about thousands of homes over a five to ten year period - that's obviously quite significant in solving London's housing crisis," Small-Edwards added.
Mayor of London Sadiq Khan has strongly endorsed this approach. During a City Hall session in October, he branded investment in housing a 'slam dunk' for pension funds, noting they are geared for long-term, guaranteed returns. He expressed bewilderment that Canadian pension funds invest in London housing while domestic funds do not do so more aggressively.
LCIV's Response and Current Projects
In response, a spokesperson for LCIV highlighted its existing commitments, stating that local investment has long been a core part of its strategy. They pointed to the £530 million already allocated to UK affordable housing through its dedicated fund, with a quarter of its partner fund schemes invested.
The spokesperson cited specific projects where this capital is making a difference:
- Abbey Place in Greenwich: Forward funding supported 245 affordable homes, reconfigured from private rental.
- Wood Wharf in Canary Wharf: 294 regulated rental homes are being delivered, with completion expected from 2026.
Beyond housing, LCIV also noted its £250 million London Fund invests in regeneration and critical infrastructure, including Shepherd’s Bush Market and major developments at London Bridge. The organisation stated it will continue to work with the Mayor's Office, London Councils, and the Greater London Authority to identify a stronger pipeline of investable London projects.
A spokesperson for the Mayor reiterated that tackling the housing crisis remains his top priority, citing record numbers of new council homes started. The Mayor's office is actively encouraging institutional investment to deliver more affordable homes, including through the Key Worker Living Rent scheme.
