The industry fund has taken a 49 per cent stake in subscription vehicle provider Splend alongside IFM and other co-investors as it looks to build a 10 per cent exposure to climate solutions in its global portfolio.
After years of powering super returns into the double digits, US equities are walking a tightrope, and one misstep could send them plunging to earth. But the story that put them up there in the first place still holds true.
Why instos are on the hunt for US housing
While not yet a household name down under, Kayne Anderson has raised nearly $3 billion from the local institutional segment for strategies across US middle-market private credit and real estate debt and equity. It focuses only on the ‘alternative’ sectors of medical office, student housing, storage facilities and multifamily Class B housing.
“It’s home to our nation’s workforce,” says Amanda Nunnink, Kayne Anderson co-head and senior managing director for multifamily impact housing. “You would call them essential workers.”
The average occupancy in rental housing across the US is 95 per cent, meaning there’s a steady durability of cashflow and transparency of data. Class B housing has maintained its higher levels of occupancy as compared to Class A (luxury) or Class C (older, less desirable) housing.
“It’s a really attractive, risk-adjusted hedge to a lot of strategies because there’s durability there. The other benefit is that the US backstops its housing market through Freddie Mac and Fannie Mae,” Nunnink says. “They lend on single family home purchase in the trillions but are required to provide liquidity for the multi-family market, and so there’s an access to capital that is consistent… annually, those agencies have a mandate to lend $150 billion.”
That steady access to debt at a reasonable rate and structure provides liquidity that other asset classes in the US don’t have, Nunnink says. That’s “absolutely a benefit” to investing in multi-family abroad, and particularly in the US, where Kayne Anderson has also found a way to make multifamily work as an impact investment by reporting its residents’ on-time rent payments to all three credit bureaus.
“Our home mortgage system requires that banks report on-time payments to credit bureaus, but it’s not required in rental housing,” Nunnink says. “So your monthly payment goes unnoticed unless you’re late. Credit scores are a part of your DNA in the states – access to car loans, student loans, credit cards and housing… If we provide residents with not just a safe and clean place to live, but also the resources that help them on a pathway to resilience, we’re seeing incredible outcomes.”
