Pluto secures strategic investment to accelerate lending to SME builders

Pluto Finance has announced a substantial strategic investment by the Universities Superannuation Scheme (USS) to provide funds to UK SME developers delivering new housing.

The private pension scheme has made a significant minority investment in Pluto to enable a major expansion of the business, as well as committing £75m as a cornerstone investor alongside the lender's sixth development lending vehicle, which is targeting a £300m capital raise this autumn.

The funding will supplement the existing £840m of institutional capital currently supporting Pluto’s lending activities and will support the growth of its existing strategies and planned new initiatives in commercial and residential investment lending.

Bryan Cave Leighton Paisner acted as legal counsel, and Alvarez & Marsal as tax adviser to Pluto, while NatWest Markets, Linklaters and PwC advised USS on financial, legal and tax matters, respectively.

Pluto closed its first real estate debt vehicle in 2011 and, since then, has lent over £2bn across more than 200 loans, providing development and short-term finance for acquisition, repositioning or sell-through. 

Justin Faiz, co-founder of Pluto (pictured above), said it was delighted to be working with USS.  

“With its size, long-term perspective and commitment to the UK, USS is the perfect partner to help Pluto with its next phase of growth to become the leading one-stop-shop for all types of UK property finance.  

“Its support will allow us to expand our team and move into adjacent lending strategies, while maintaining the quick turnaround and flexibility that our borrowers have come to expect from Pluto. 

“The USS investment is an incredible endorsement of our hard working team and lending track record, of which we are immensely proud.”

Eamon Ray, senior investment director for the private markets group at USS Investment Management, commented: “USS is delighted to have established this strategic partnership with Pluto, highlighting our commitment to long-term investment in the UK, particularly in critical sectors such as residential housing. 

“The UK faces a chronic housing shortage and the sector requires long-term sustainable capital to meet national targets. 

“We believe our partnership with a leading specialist in this sector will help bridge this gap in provision, while providing our members with attractive returns to fund their pensions.”

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