PETE GLADWELL Head of Public Sector Partnerships 10 October 2013 INVESTMENT INTO HOUSING: Aligning Long Term Investment with Long Term Social Need LEGAL & GENERAL. APRIL 2015 MAY 2013 1 EVERY DAY MATTERS PETE GLADWELL Head of Public Sector Partnerships 10 October 2013 1

billion pound investment programme LONG TERM INVESTMENT 15 £429m rebuild of the Royal Liverpool University Hospital. Hyde Housing Group £102m, 15-year facility THE ENGLISH CITIES FUND billion pound investment programme Schemes in Liverpool, Plymouth, Canning Town, Salford and Wakefield, over 5.4m sq ft of mixed-use space, brownfield land £40m, 25 year facility enabling 500 affordable homes £252m investment 50 year lease Acquiring 4,000 homes Building 7,00 houses Methodist Care Homes £70m long term (30 year) RPI linked lease. Transport and Logistics c£320m, maturities to 30 years University of Southampton £93m, 40 years income 1,104 beds Sentinel Housing, private placement (registered social housing provider in Hampshire)

‘Patient Money’: Approached with a different mindset… APRIL 2015 ‘Patient Money’: Approached with a different mindset… Applies to both in-house L&G Annuity and third party pension fund capital

The Intersection of Long Term Social Needs APRIL 2015 The Intersection of Long Term Social Needs HOUSING Long-Term Investment CARE HEALTH

APRIL 2015 Potential Sources of Interference in Transmitting Society’s Long Term Capital to Address Society’s Long Term Needs More Risk Derivative Swaps House Builders HOUSING Investment Banks Long-Term Investment PFI’s Developers CARE HEALTH Securitisations Housing Association Debt Gilts (Govt borrowing) -> Grant Local Authorities and Govt Identifying and Quantifying Long Term Need Less Risk Some have proved themselves vital… others are only in it for themselves!

Directing Society’s Long Term Capital to the Long Term Need APRIL 2015 Directing Society’s Long Term Capital to the Long Term Need Housing Associations Flexibility to take More Risk HOUSING House builders (For Sale) Long-Term Investment Contractors CARE HEALTH Grant (Govt borrowing) Local Authorities (and Govt) Identifying and Quantifying Long Term Need Or Less Risk Seeking an organic and simple transmission of Money to address Need

Collaborative approach needed for creative problem-solving Government to implement Lyons and Armitt to tackle infrastructure and housing shortages Need for new type of capital to provide housing: long term money with lower return expectations New level of shared Trust and Ambition between Public and Private Sector Partners “The significant problems that we have created cannot be solved at the level of thinking we were at when we created them.” – Albert Einstein